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23h ago

House Passes Tax Bill Introducing $1,000 'Trump Accounts' for Newborns

The GOP-led proposal, now headed to the Senate, aims to foster long-term wealth growth through government-seeded savings accounts for children born between 2025 and 2029.

Vanessa Moreno, 24, changes the diapers of her two-month-old baby Makayla at Prototypes residential treatment program in Pomona, California, March 26, 2013. Prototypes is part of the Second Chance Women's Re-entry Court program, one of the first in the U.S. to focus on women. It offers a cost-saving alternative to prison for women who plead guilty to non-violent crimes and volunteer for treatment. Of the 297 women who have been through the court since 2007, 100 have graduated, and only 35 have been returned to state prison. Picture taken March 26, 2013. REUTERS/Lucy Nicholson (UNITED STATES - Tags: SOCIETY CRIME LAW TPX IMAGES OF THE DAY)
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Overview

  • The House approved a tax bill featuring federally funded 'Trump Accounts,' providing a $1,000 deposit for U.S. citizen children born from 2025 to 2029.
  • Parents can contribute up to $5,000 annually to these accounts, which are invested in a U.S. stock index fund and grow tax-deferred.
  • Qualified withdrawals can be used for education, home down payments, or starting a small business and are taxed at long-term capital gains rates.
  • The accounts, originally called MAGA Accounts, were renamed Trump Accounts before the House vote and now await Senate consideration, where changes may arise.
  • Advocates view the initiative as a step toward reducing wealth gaps, with similar state-level programs in Connecticut and Colorado serving as precedents.