And while the president has shown no qualms about taxing the 1 percent to help out the 99 percent, this policy was not a simple shift of money from the rich to the poor, but from the financially comfortable to the somewhat-less-comfortable. The hardest hit might be those in the top 5 percent of earners, who are certainly financially comfortable but who are not millionaires, and for whom college tuition without the benefit of generous financial aid remains a pricey proposition. (And like their wealthier friends in the 1 percent, they happen to be disproportionately active in politics, particularly when it comes to campaign contributions.)

An even bigger political problem for the administration was that it did not propose to limit the tax increase to those earning more than $150,000 or $200,000. So although wealthier families would have borne the brunt of the change, it would have affected anyone with a 529 account, including the very people around whom the entire Democratic agenda is centered. That allowed Republicans like Speaker John Boehner to argue that Obama should withdraw the plan "for the sake of middle-class families."

The immediate practical impact of Obama's reversal is nil; congressional Republicans had already swatted down his tax plan, and to scrap a single element of the proposal is akin to plucking a feather from a dead bird. But as Jonathan Weisman noted while breaking the news in The New York Times, the retreat is yet another ominous sign for the prospects of a bipartisan tax overhaul. Lawmakers in both parties say they want to simplify the tax code and cut rates for the middle class, but doing so without busting the budget requires the elimination of dozens of popular tax breaks like the 529 incentive. Obama was similarly burned earlier in his tenure when he proposed a cap on charitable deductions, as was a top Republican tax-writer, Representative Dave Camp, when he unveiled a plan last year that would have eliminated the state and local tax deduction, the first-time homebuyer tax credit, and many other loopholes backed by powerful lobbying interests.

As with the college savings accounts, those incentives benefit both the 1 percent and people who may look rich but who don't feel rich. It's a debate that last played out in 2012, when in a last-minute concession, the Obama administration agreed to a fiscal-cliff deal that raised taxes on families earning more than $450,000, rather than its initial proposed threshold of $250,000. Now that Democrats and Republicans are both talking about the middle class, they can start by figuring out what exactly that means.

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