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Lawmakers save ‘529’ savings plans

Making community college free for virtually anyone who wants to attend is a plan President Barack Obama is eager for the public to know about – and, of course, to be grateful to him as its author.

Less publicity went to another White House proposal that would have hurt millions of American families who scrimp and save to put the kids through college.

Obama had asked Congress to eliminate tax breaks connected to the “529” savings plans about 7 million Americans use to build college funds. The plans allow participants to contribute what they can into investment funds that often earn substantial returns. For some people, it is an excellent way to put aside money to send children or grandchildren through college.

But Obama wanted to end tax breaks for 529 plans. He claimed – as he so often does – the incentives benefit only the rich. Many 529 participants are far from wealthy.

In fact, more than 70 percent of them have household incomes below $150,000 a year, while 10 percent are under $50,000, according to the College Savings Foundation.

Under pressure from both Democrats and Republicans in Congress, Obama reportedly is backing away from his proposal.

Good.

Lawmakers should not enlarge government at the expense of hard-working taxpayers.

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