Latest news with #MAGAAccounts
UPI
41 minutes ago
- Business
- UPI
Trump, CEOs to unveil savings accounts for newborns
Elon Musk and President Donald Trump shake hands during a news conference in the Oval Office at the White House on May 30, 2025. Musk ended his work with the Trump administration and last week criticized his budget bill. File Photo by Francis Chung/UPI | License Photo June 9 (UPI) -- President Donald Trump on Monday afternoon will meet with several companies' chief operating officers in a roundtable about plans to collectively invest several billion dollars into savings accounts for the children of their employees. The "Invest America" event is scheduled to take place at 2 p.m. EDT in the White House. The CEO participating are Michael Dell of Dell Technologies, Brad Gerstner of Altimeter Capital, Rene Haas of Arm Holdings, Parker Harris of Slack and Salesforce, William McDermott of ServiceNow, Dara Khosrowshahi of Uber, David Solomon of Goldman Sachs, Vladimir Tenev of Robinhood. The pilot program would seed index fund accounts with $1,000 in Treasury Department funds for U.S. citizens born between Jan. 1, 2025, and Dec. 31, 2028. Companies can also contribute to the tax-deferred accounts. Once a child turns 18, money can be used for education expenses or credentials, down payment on a first home or capital to start a small business. Sen. Ted Cruz, R-Texas, said the accounts give children "the miracle of the compound growth, the ability to accumulate wealth, which is transformational." The funds will track the overall U.S. stock market. Additional contributions of up to $5,000 per year will be allowed. The accounts would be controlled by children's guardians until they turn 18. The pilot program is similar to other savings account options, including 529 college savings plans, which also have contribution limits. Some already offer a type of "baby bonds" program for parents. The federal savings program was previously referred to as "Money Accounts for Growth and Advancement" or "MAGA Accounts." The provision is part of the massive budget bill passed narrowly by the U.S. House last month and has moved to the Senate. Republicans want the bill signed by Trump before the Fourth of July. "The passage of the One Big Beautiful Bill will literally change the lives of working, middle class families across America by delivering the largest tax cuts in history, increasing the child tax credit, and by creating this incredible new 'Trump Account' program, which will put the lives of young Americans on the right financial path!" White House press secretary Karoline Leavitt told CNBC in a statement. The legislation includes an extension of expiring tax cuts from 2015 and money for immigration. Some Republicans, as well as Elon Musk, who ran the Department of Government Efficiency, want to add to the deficit. The Congressional Budget Office projects it will increase federal deficits by about $2.4 trillion over a decade. "I didn't go out to craft a piece of legislation to please the richest man in the world," House Speaker Mike Johnson, R-La., said in response to Musk's criticisms in an interview with ABC News on Sunday. "What we're trying to do is help hardworking families who are trying to make ends meet."
Time of India
27-05-2025
- Business
- Time of India
In 'big, beautiful bill ', Trump accounts just a political stunt to boost baby boom?
The Republican tax bill contains flashy goodies for families with kids. The flashiest: savings accounts for children — branded Trump Accounts — created and initially funded by the Treasury Department. These will consist of $1,000 in invested assets for each American citizen born through 2028, plus whatever funds parents later add. So if you want to have a baby, hurry up! The seeding of the accounts (previously called MAGA Accounts) expires at the end of President Donald Trump's term. The president has made his goal clear: 'I want a baby boom.' House Republicans also proposed expanding the Child Tax Credit from $2,000 to $2,500; that would also expire in four years. But if more babies are the goal, these cash carrots are the wrong incentive. Claudia Goldin said it best in her recent paper, 'Babies and the Macroeconomy': 'The birth rate is … clearly determined by forces that are independent of the whims of governments.' In a 2021 review of the literature of thirty-five studies across Europe and North America, 'Can Policies Stall the Fertility Fall?,' the three authors — a statistician, a sociologist and a public health expert, all in Norway — concluded that even sizable cash benefits have a modest impact on fertility. ALSO READ: Is Trump targeting Harvard because the elite university rejected his youngest son Barron? What you need to know Live Events Instead, the authors found child care and paid leave to be more promising levers. Access to child care slightly increased both the number of children families have and the number of first-time births — especially among low- to middle-class families. Child care support may increase the fertility of stay-at-home mothers by giving their older toddlers access to care. Paid parental leave was also found to have small, but positive, effects on fertility, in particular for higher-earning parents. Unfortunately, paid leave for parents and child-care support are largely missing from the reconciliation bill, though there are a handful of renewed and expanded tax credits for businesses that provide these things. The GAO reports that these have historically been underutilized. Perhaps baby-making isn't the goal anymore. After all, Trump Accounts cannot be accessed until the kids turn 18 and are explicitly for the kids, not the parents making the babies. Perhaps a better way to view Trump Accounts is not as encouraging a baby boom, but as a broader investment in family economic well-being. ALSO READ: Did Harvard reject Barron Trump? Truth behind his college choice has sparks buzz online That would be good news. As a country, we chronically underinvest in the young in favor of the old. Parents are more pessimistic about their kids' future, according to Wall Street Journal polling, than any time in recent memory. The US is an international outlier with its high share of single parents. Labor policy still doesn't reflect the reality that in most households, all parents are working. But there are better ways to promote familial financial well-being than Trump Accounts. The same criticisms apply as when Democratic Senator Cory Booker ran for president on a platform of baby bonds: First, families need support today, not locked up funds to be used two decades from now. This is particularly true for the bottom half of the income distribution. Second, none of these savings accounts speak to each other — 529, 401k, IRA, FSA or HSA, now Trump Accounts. It can be hard to predict where you'll need the savings, and savers are penalized for withdrawing for other uses. Hence the long-time conservative push for universal savings accounts. ALSO READ: Trump's promise to make US world's 'crypto capital' to be a reality soon? Check details Third, there is still a taxpayer cost attached: a nearly $20 billion price tag when combining the costs of seeding the accounts and tax-free contributions, according to the Joint Committee on Taxation. If the contribution program doesn't expire after 3.5 years, the price tag will rise by another $15 billion over the next 10 years, based on their average expected annual expenditures for 2027 and 2028. I believe we need more public investment in children, but the question remains: Who is paying for that? And fourth, two-thirds of American kids cannot read or do math at grade-level by fourth grade. This suggests that instead of an investment whose biggest expected use is higher education, children need earlier investments in high-quality tutoring to stay on track. Before sharing in the noble goal of stock ownership, let's get reading and math right. ALSO READ: This US state poised to enforce age verification on Apple, Google app stores for users under 18 To which I'd add a fifth: a four-year expiration date suggests a short-term political mindset and budget trickery much more than seeding the ground for long-run family flourishing. When it comes to supporting families, President Trump would do best to return to his roots. In his first term, he doubled the Child Tax Credit; boosted funding for the Child Care and Development Block Grant, the country's primary way of delivering child-care support to low-income families; passed 12 weeks of paid parental leave for all federal workers; and proposed a universal 6-week paid leave program for all American moms. On top of this, he oversaw a time of exceptional economic growth. This go-around he seems determined to inflict tariff pain and higher costs on American families. An extra $500 in child tax credit payments per family for a few years sounds nice, until you realize that the costs of tariffs per family are currently estimated to be nearly $3,000, per the Yale Budget Lab. Moreover, the bill as drafted puts us somewhere between $3 and $4 trillion more into debt; guess who inherits that. It might not have had the snazzy Trump Account branding, but Trump's first term arguably was a much better deal for babies.
Bloomberg
27-05-2025
- Business
- Bloomberg
Trump Accounts? Republicans Have Had Better Ideas
The Republican tax bill contains flashy goodies for families with kids. The flashiest: savings accounts for children — branded Trump Accounts — created and initially funded by the Treasury Department. These will consist of $1,000 in invested assets for each American citizen born through 2028, plus whatever funds parents later add. So if you want to have a baby, hurry up! The seeding of the accounts (previously called MAGA Accounts) expires at the end of President Donald Trump's term. The president has made his goal clear: 'I want a baby boom.' House Republicans also proposed expanding the Child Tax Credit from $2,000 to $2,500; that would also expire in four years.
Time of India
23-05-2025
- Business
- Time of India
In US tax bill, babies to get $1,000 bonus in ‘Trump Accounts': Check eligibility criteria and other details
US House Republicans made a last-minute change to the $1,000-per-baby MAGA Accounts in their sweeping tax bill: Calling them " Trump Accounts " instead. Last week, the US government proposed a wealth creation programme for American children born during President Donald Trump's second term in office. The draft law wants the funds to be added to a "money account for growth and advancement" or "MAGA accounts". In simple terms, $1,000 (Rs 85,529) will now get deposited into "Trump accounts". Under the proposal, "MAGA accounts" can later be used for education expenses or credentials, the down payment on a first home or as capital to start a small business. The final version of the bill that House Republicans passed Thursday could still face pushback in the Senate. ALSO READ: Trump's 'Big, beautiful bill' is here: Who are the top gainers and losers? Check details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 15 Most Beautiful Female Athletes in the World Click Here Undo How Trump Accounts work? The Trump Account offers a tax advantage for those looking to get a head start on saving. Earnings grow tax-deferred, and qualified withdrawals are taxed at the more favorable long-term capital gains rate. 'This isn't significantly different from the tax treatment of a standard brokerage account,' said Sam Taube, lead investing writer at NerdWallet. Live Events There are other similar savings options available. Custodial brokerage accounts — commonly referred to as UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gifts to Minors Act) accounts — enable parents to transfer assets like cash, stocks, bonds, and mutual funds to a minor. However, investment income from these accounts, such as dividends and interest, may be subject to the 'kiddie tax,' which applies the parents' tax rate. Another alternative is the 529 plan. With a 529 account, earnings grow tax-advantaged, and withdrawals are entirely tax-free when used for qualified education expenses, including tuition, fees, books, and room and board. ALSO READ: Hidden provision in Trump's 'big, beautiful bill' might undermine US Supreme Court authority Who are eligible for Trump accounts? Children born in the United States between January 1, 2025, and January 1, 2029, will be eligible to receive funds through a new government initiative. The money will be invested in financial markets on their behalf, and they will be able to access it when they reach adulthood. The funds can be used for specific purposes such as purchasing a home or paying for college, according to CBS News. According to reports, both the child and their parents must have Social Security numbers to be automatically enrolled in the program. These accounts will be established and funded by the US Treasury. In addition to contributions from parents, third parties will also be allowed to contribute up to $5,000 per year. The federal government will contribute an initial $1,000 to each eligible child's account. ALSO READ: Donald Trump's tax and spending mega-bill to cost millions of jobs in US, drive up your bills When can you withdraw? At age 18: Children can withdraw up to 50% of the account balance. Between ages 25 and 30: They can access the full balance, but only for approved uses. After age 30: The funds can be used for any purpose. Tax Implications Some aspects of the program have raised concerns among tax experts. Contributions must be made with post-tax income, and investment gains will be taxed upon withdrawal. According to The New York Times, this structure makes the account resemble a standard investment account rather than a tax-advantaged one. Investment gains will be subject to the long-term capital gains tax rate. However, if funds are withdrawn for unapproved uses, they will be taxed as regular income, and a 10% penalty may also apply.
Yahoo
22-05-2025
- Business
- Yahoo
Ted Cruz says he doesn't mind that his $1,000 investment account plan for babies is now called 'Trump accounts'
The GOP renamed "MAGA accounts" to "Trump accounts." If approved, $1,000 will go to any baby born between 2024 and 2028. Sen. Ted Cruz — the person who came up with the idea — says he doesn't mind the Trumpified name. First, they were called "MAGA accounts." Now, they're "Trump accounts." As part of their "One Big Beautiful Bill," Republicans on Capitol Hill want to establish new investment accounts for American children. Under the plan, babies born after January 31, 2024 and before January 1, 2029 — essentially, the last three years of President Donald Trump's term — will receive $1,000 for the account from the federal government. The original name was an acronym for "Money Account for Growth and Advancement" — the same initials as Trump's political movement. In a last-minute change before the House passed their version of the "Big Beautiful Bill" on Thursday, "MAGA" was replaced with "Trump." While the president stands to get the credit, it was Sen. Ted Cruz's idea to create "Invest America" accounts. The Texas Republican says he doesn't mind. "What I care is that they remain in there," Cruz told BI, referring to the provision's inclusion in the larger bill. "I think it doesn't matter what they're called. What it matters is what they do." In terms of political branding, it's further than other recent presidents have gone. President Joe Biden, for instance, chose not to sign COVID-19 stimulus checks like Trump did — though he later said it was "stupid" not to do so. Other government-backed programs have taken on the name of their creators. The Affordable Care Act, championed by President Barack Obama, is commonly known as "Obamacare," though that was initially a Republican epithet. And Sens. William Roth and Claiborne Pell have also found their names written into the tax code. "That is not unusual," Cruz said. "You have things like Roth IRAs that were named after Senator Roth. You have things like Pell Grants that were named after Senator Pell. You have things like Obamacare that were named after President Obama." It's unclear exactly why the accounts were named after Trump, and the White House did not respond to a request for comment. Cruz had pitched the idea as a way to give kids a stake in the free market from an early age, allowing them to potentially reap financial benefits down the line while making them less likely to support socialism. "It enables every newborn child in America to experience the enormous benefits of compounded growth, and to accumulate significant resources with the passage of time," Cruz said. "It creates a generation of new capitalists." According to the bill, individuals with "Trump accounts" will be able to use the savings for things like higher education and first-time home purchases starting at age 18. Money taken out of the account for those purposes will be taxed as long-term capital gains, while money withdrawn for other purposes is taxed as regular income. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
