A policy analyst says the proposed GOP tax plan is a step in the right direction because it provides more school choice opportunities.
Currently, parents are able to put after-tax savings into Coverdell accounts to help save for college tuitions. Under the proposed 529 plan, parents would be able save more for both college and K-12 expenses, reports Jonathan Butcher of The Heritage Foundation.
"What they are suggesting," he tells OneNewsNow, "is that they would fold the Coverdell program into the 529 program so parents would still have the higher amount that they can save each year, and they'd be able to use the money for K-12 and college expenses."
Butcher is senior analyst at the Center for Education Policy, where colleague Lindsey Burke has written about the GOP's planned improvements.
This plan is only a small step but nonetheless an important one, Butcher says, in simplifying the nation's complicated tax code.
"But I hope that lawmakers would recognize that making the tax code even slightly simpler is a positive step," Butcher observes, "and giving families more access to their own savings is a good step for liberty and a good step for freedom."
The biggest advantage to investing in a 529 plan, he further explains, is that withdrawals are free from any federal income tax.