GOP takes victory lap on scuttled Obama tax proposal

Rep. Lynn Jenkins (R-Kan.) called President Obama’s recently scuttled college savings tax a “terribly misguided idea” during Saturday morning’s weekly Republican address.

“If implemented his scheme would have turned back the clock on middle-class families, and taken money from your savings to pay for more government,” she said in the prerecorded video.

{mosads}“This would have discouraged families from using 529s, meaning less savings, more debt, and more government dependence,” she said, referring to the tax-free college savings accounts.

Jenkins’s video serves as a victory lap for Republicans, who derided the president’s plan before he pulled it back on Tuesday. Obama had proposed taxing the withdrawals from the 529 college plans, arguing that allowing families to withdraw tax-free largely benefitted wealthier families.

But Republicans framed the tax as a burden on the middle class and successfully lobbied the White House to nix it, as White House officials called it a distraction from broader negotiations.

“It was a terribly misguided idea, but it took a public outcry for the president to realize it,” she said.

“Just days after proposing this tax on 529s, he agreed to drop it from his budget.”

The GOP Conference Vice-Chair is one of the sponsors of the Republican’s preferred 529 plan. The bipartisan plan, co-sponsored by Rep. Ron Kind (D-Wis.), would loosen paperwork requirements on the accounts, count computers as a qualified expense, and allow refunds to be deposited tax-free within 60 days.

“The president should put his full weight behind our plan to expand and strengthen 529 accounts,” Jenkins said.

“We should be rewarding people who work hard and play by the rules — not punishing them.”

Jenkins also pushed the president to “reconsider threats to veto our common-sense jobs bills,” like the Keystone XL pipeline authorization. The Senate passed that bill this week, sending it to the president’s desk to set up a probable veto.