529’d

State of the Union policy proposals come, often in rapid-fire fashion, and go.  President Obama’s proposal to tax “529” college savings accounts, announced only last week and withdrawn this week, may have set a record for the quickest skedaddle.

IMG_0746The “529” plans, named for the section of the Internal Revenue Code that addresses their tax treatment, allow people to squirrel away money to pay for a family member’s college tuition.  The money gets invested, taxes on any gains are deferred, and the money that accumulates in the account can later be used to pay for a beneficiary’s college, tax-free.  That’s why savingforcollege.com says that 529 plans offer “unsurpassed income tax breaks.”

The 529 plans are such a good deal that more than 7 million of them have been created.  President and Mrs. Obama have them for their daughters, for example, and put $240,000 into those plans back in 2007.  And while the Obama Administration argues that the tax benefits for those plans predominantly favor “the rich,” it all depends on how you define “middle class” in modern America.  As the New York Times points out, 10 percent of 529 plans have been established by people with incomes below $50,000, and 70 percent of the total number of 529 accounts are owned by households with annual income below $150,000.  Is a two wage-earner family that makes $140,000 really wealthy?  My guess is that most families in that category don’t look at things that way.

The President’s 529 tax plan was a trial balloon that quickly was shown to be a lead balloon, opposed not only by the people who set up the 529 accounts, and the entities that hold and manage those accounts, but by Democrats and Republicans alike.  House Minority Leader Nancy Pelosi reportedly personally lobbied President Obama to ditch the 529 tax plan on a recent plane flight.  And the optics of the proposal aren’t that great, either.  For generations, a cornerstone of American policy has been to help citizens get their kids to college — and now we’re going to tax those industrious folks who plan ahead and save for college for their kids and grandchildren, rather than letting them be saddled with crushing student loan debt as they go forward into their adult lives?  Of all of the tax breaks available in the endless Internal Revenue Code, this is the one we’re attacking?

You can argue, I suppose, about whether the 529 tax plan was good policy, but there’s no doubt that it was bad politics.  I’m guessing that “529’d” might become part of the dictionary of political slang, to be used in the future whenever an ill-conceived proposal gets raised, quickly torpedoed, and then flushed forever down the memory hole.

Marriage And Money

How much of a successful marriage is attributable to what money can buy?  Do good marriages now carry a price tag that working class Americans cannot afford?

Those are some of the questions explored in a scholarly paper that looks at work and marriage in working class and middle class families.  A Slate article on the paper contrasts the stories of two families.  A Mom in Ohio works at a minimum wage job and has had two failed marriages, one to a man who left and another to a man who beat her; her 20-year-old daughter also has had an abusive relationship and is now dating a guy in jail.  Neither wants to get married soon.  The middle-class family in the Pacific northwest, on the other hand, can afford weekends at a vacation cabin, annual travel, and building a barn and buying a horse for their daughter who had begun “acting out” and then enrolling her in a private school involving horses.

The paper, Intimate Inequalities: Love and Work in a Post-Industrial Landscape, is based on interviews and surveys of more than 300 Americans.  It focuses on job stability and security.  Secure middle-class couples can afford luxury items like vacations and gym memberships that keep their marriages viable, whereas working class people who don’t have stable sources of income are more concerned with keeping a job and their own survival than with providing materially and socially for others.

I have no doubt that economic uncertainty and loss of a job can provide additional stress that can turn a rocky marriage into a divorce.  The two stories in the Slate article, however, also suggest that other, more important factors can come into play.  Marriages simply don’t last when one spouse is physically abusive, no matter how many horses a couple can afford.  Men who can’t make a long-term commitment aren’t going to make good husbands, regardless of socioeconomic class.  Dating guys who are in jail probably isn’t a good recipe for a stable and satisfying married life.  Serial philanderers, people with emotional problems, and others who are ill-suited for marriage similarly are found at all income levels.

There’s something a bit off-putting, too, in the implicit suggestion that successful marriages are primarily about money, rather than love and compatibility.  Depicting marriage as primarily an economic arrangement that people will endure because it allows them to take nice vacations inevitably discounts the essential emotional component of a strong marriage.

Sometimes marriages end in divorce because people grow apart over time; sometimes they fail because people just exercised poor judgment in getting married to people who weren’t suitable in the first place.  Money woes and job concerns may be a factor in some instances, but I think successful marriages are about a lot more than what is in the bank account.