House Republican Tax Plan Combines Coverdell Education Savings Accounts and 529 College Savings Accounts

Photo: Geoff Livingston / CC2.0
House Republicans today unveiled their plan to alter America's tax system, including a proposal to combine Coverdell Education Savings Accounts (Coverdells) and 529 College Savings Accounts (529s) while expanding the annual Coverdell contribution cap from $2,000 to $10,000.


The following quote can be attributed to Justin King, policy director for New America's Family-Centered Social Policy Program:

"The House GOP's plan to combine Coverdells and 529s is a subsidy for the rich masquerading as tax simplification. Coverdells are a waste of public resources that serve the interest of a tiny minority of wealthy families who want to opt out of the public school system. Instead of reforming them, the GOP is proposing to quintuple the size of the Coverdell private school tax subsidy.
529s can be an effective tool for saving for post-secondary expenses. Unfortunately, very few families that most need public support in saving for college own 529 accounts. 529s should be reformed and expanded in order to build expectations for all children to attend and succeed in college. We can invest in our public schools and build on the success of inclusive child savings account initiatives in states and cities all around the country to pave the way for college success, or we can keep diverting scarce public resources to the wealthy. This proposal chooses the latter path and should be discarded."

Author:

Justin King is policy director of the Family-Centered Social Policy program at New America. In this position, he works to develop and advance innovative public policies that expand economic opportunity by broadening access to high-quality financial products, increasing savings and growing asset ownership.