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President Barack Obama recently proposed to remove a major tax benefit from 529 accounts, which millions of families use to save money for college. The account name, 529, refers to section 529 section of the Internal Revenue Code. According to a New York Times article, experts say these tax-advantaged accounts primarily benefit affluent families. Altogether, seven million families are using 529 plans and have saved $217 billion. The article notes that families with an income of over $200,000, which puts them in the top 6 percent of the population, hold 70 percent of 529 accounts. The president’s proposal would have replaced all current college savings tax preferences with a single tax credit that would be more widely available to middle-class families, but that proposal had no chance of passing this Congress. Due to public pressure, President Obama withdrew his proposal to remove tax benefits from 529 accounts. While Woodstock Institute applauds President Obama for trying to make college more accessible for the middle class, there is much more that can be done. 

This post originally appeared on Civic Tech Voices  

At Woodstock Institute, our mission is to advance economic justice, particularly for low-wealth communities and communities of color. To move towards this goal, we prepare data concerning economic justice and empower others to use and understand it. As our national partners at the National Community Reinvestment Coalition say, data drive the movement. 

President Barack Obama’s State of the Union speech proposed new initiatives to help middle-class Americans, including education, job growth, infrastructure, and climate change initiatives. While these initiatives, if implemented, could improve economic security for the middle class, we still have a long way to go to ensure that those at the bottom of the income distribution—not just the middle class—also have opportunities to advance.

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