A Made-Up Holiday That Could Help Your Kids Go to College

A Made-Up Holiday That Could Help Your Kids Go to College

iStockPhoto/The Fiscal Times
By Beth Braverman

Marketers are great at making up holidays—and who doesn’t love having an excuse to eat donuts on National Donut Day or pizza on National Pizza Day?

Most of these special days, however, tend to take a toll on both our wallets and our waistlines. Today may be an exception: The personal finance and college saving industries have dubbed today 529 Day (Get it? 5/29), a day to celebrate saving for college via tax-favored 529 plans.

Americans could benefit from any impetus to save more for higher education. The average American family that’s saving for college put away about $2,600 last year and has a total of just over $10,000 socked away for education, according to Sallie Mae’s annual How America Saves for College report. That’s the lowest amount since the survey began in 2009 — or about enough to send one kid to college for one semester at today’s prices.

Related: Top-rated 529 Plans Probably Are Not For You

Many states are “celebrating” the day with everything from waived enrollment fees to discounted admission to local baseball games. (Each plan is sponsored by a state but run by financial firms.) Check out this interactive map to find out if your state is offering any incentives today.

Contributions to a 529 plan are made after federal taxes, but the money grows tax-free as long as the proceeds are used for education costs. Some states also offer tax breaks on contributions.

The average cost of attending public college this year is $19,000. For private college it’s $33,000, according to The College Board. So there’s no time like today to start saving.

Chart of the Day: Boosting Corporate Tax Revenues

GraphicStock
By The Fiscal Times Staff

The leading candidates for the Democratic presidential nomination have all proposed increasing taxes on corporations, including raising income tax rates to levels ranging from 25% to 35%, up from the current 21% imposed by the Republican tax cuts in 2017. With Bernie Sanders leading the way at $3.9 trillion, here’s how much revenue the higher proposed corporate taxes, along with additional proposed surtaxes and reduced tax breaks, would generate over a decade, according to calculations by the right-leaning Tax Foundation, highlighted Wednesday by Bloomberg News.

Chart of the Day: Discretionary Spending Droops

By The Fiscal Times Staff

The federal government’s total non-defense discretionary spending – which covers everything from education and national parks to veterans’ medical care and low-income housing assistance – equals 3.2% of GDP in 2020, near historic lows going back to 1962, according to an analysis this week from the Center on Budget and Policy Priorities.

Chart of the Week: Trump Adds $4.7 Trillion in Debt

By The Fiscal Times Staff

The Committee for a Responsible Federal Budget estimated this week that President Trump has now signed legislation that will add a total of $4.7 trillion to the national debt between 2017 and 2029. Tax cuts and spending increases account for similar portions of the projected increase, though if the individual tax cuts in the 2017 Republican overhaul are extended beyond their current expiration date at the end of 2025, they would add another $1 trillion in debt through 2029.

Chart of the Day: The Long Decline in Interest Rates

Wall Street slips, Dow posts biggest weekly loss of 2013
Reuters
By The Fiscal Times Staff

Are interest rates destined to move higher, increasing the cost of private and public debt? While many experts believe that higher rates are all but inevitable, historian Paul Schmelzing argues that today’s low-interest environment is consistent with a long-term trend stretching back 600 years.

The chart “shows a clear historical downtrend, with rates falling about 1% every 60 years to near zero today,” says Bloomberg’s Aaron Brown. “Rates do tend to revert to a mean, but that mean seems to be declining.”

Chart of the Day: Drug Price Plans Compared

By The Fiscal Times Staff

Lawmakers are considering three separate bills that are intended to reduce the cost of prescription drugs. Here’s an overview of the proposals, from a series of charts produced by the Kaiser Family Foundation this week. An interesting detail highlighted in another chart: 88% of voters – including 92% of Democrats and 85% of Republicans – want to give the government the power to negotiate prices with drug companies.