US President Donald Trump has proposed an initiative to invest in newborn babies through his 'Big Beautiful Bill'. This program aims to open investment accounts for all American babies born during Trump's current term as President.
These investment accounts are known as 'Trump Accounts', and they are intended for families of all income levels. The 'Trump Accounts' pilot program is part of the 'One Big Beautiful Bill'.
What are 'Trump Accounts'?
'Trump Accounts' are new tax-exempt investment accounts designed to benefit all American children. Initially, these accounts were referred to as MAGA Accounts, reflecting the president's Make America Great Again campaign slogan.
During a recent roundtable discussion, Trump explained that the federal government would make a one-time contribution of $1,000 into a tax-deferred account for every US citizen born between December 31, 2024, and January 1, 2029. These accounts will track the stock market and be controlled by the child's guardians.
This provision means that children born between 2025 and 2028 would receive $1,000 from the federal government in a tax-deferred account. Over 18 years, these accounts would be linked to a mutual fund or index fund based on the stock market's performance.
Parents can also contribute up to $5,000 tax-free each year to these 'Trump Accounts'.
Program Details
- Children can access the money at age 18 for purposes like education, homeownership, or starting a business.
- If the funds are used for other purposes, they will be taxed at a higher rate.
- The full balance will be available at age 30.
The estimated annual cost of the program, with approximately 3.6 million US births each year, could exceed $3 billion, as reported by the Washington Post. Republicans have not released any official cost estimates for the initiative.
Reasons Behind the Initiative
- To support the 'Big Beautiful Bill' and gain Senate approval.
- To promote a pro-family, pro-child initiative amid criticism over proposed cuts to programs like Medicaid and SNAP.
- To address concerns about adding $3 trillion to the national debt over the next decade.
Wealth Equality and Program Benefits
Supporters of the program note that it benefits all Americans, regardless of income level, unlike similar state-run programs. 'Trump Accounts' aim to provide financial support to children from all backgrounds.
The initiative is seen as a counter to claims that the bill primarily benefits the wealthiest Americans. The White House emphasizes that the 'One Big Beautiful Bill' will positively impact middle-class families through tax cuts, child tax credits, wage increases, and economic growth.
Impact on Children's Future
President Trump believes that the initiative will give American children a strong start in life without cost to taxpayers. Business leaders like Michael Dell support the program, stating that it will increase the likelihood of children graduating from college, starting businesses, buying homes, and achieving financial stability.
Corporate leaders from companies like Dell Technologies, Salesforce, Uber, and Goldman Sachs have expressed interest in participating in the initiative. Trump hopes that these accounts will provide children with a significant advantage in life.
Source: Mint
