Obama dropping plan to tax college savings

[Yahoo! News]

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President Barack Obama has dropped a controversial proposal to tax "529" college savings plans, a White House official said on Tuesday, calling it a "distraction" from administration efforts to provide middle-class tax relief. The proposal had aroused opposition from Republicans and Democrats in Congress. A source familiar with the situation said House of Representatives Democratic leader Nancy Pelosi had pressed senior administration officials to drop the proposal as she flew with Obama on Air Force One from India to Saudi Arabia. "Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support," the White House official said.

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