In Obama’s state of the Union address he discussed a variety of topics. These ranged from more affordable healthcare, space exploration, and two free years of community college. While all of these seem like great ideas there is something that was missing from the President’s State of the Union address, the cost.
Take the cost of making community college free, for example. In order to pay for this Obama is planning to enact a law which will allow for 529 college plans and home appreciation to be taxed. It used to be that those who saved responsibly for college were given a nice tax benefit for doing so, but under Obama’s plan this would all be erased. This would substantially hurt the middle class more than any other class. The wealthy will not be as deeply affected by this, as they completely out of pocket, and the lower class won’t be affected, as they mainly pay for college through financial aid. Instead it is the middle class, whose withdrawals from bank accounts and loans will be taxed, while at the same time these withdrawals will show up as income, making financial aid much less. Additionally, the government is also going to be taxing the appreciation of houses through inheritance. Appreciation of housing cost used to be one of the few things that was truly profitable from inheritance, but with Obama’s new laws, these would be significantly taxed as well.
In many ways this plan is plain and simple clientelism. It should be remembered that the Obama’s motives are not purely based on altruism. Obama is going to use this promise of free college to gain the votes of those for whom college is too expensive right now, for the Democratic Party, as Obama cutely pointed out he shall not be running again. With college prices as high as they are right now, that is perhaps a significant portion of the population. However, the President’s plan will hurt many hard working middle class Americans by redistributing their money to pay for the education of others. Fortunately, a GOP Congress will hopefully be a bulwark against these plans actually coming to fruition.
The money for all of these expensive government projects mentioned in the State of the Union will not becoming from the President’s own pocket, the money will be coming from the pockets of the American people.