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House Republicans have introduced a new proposal to provide every American baby born between January 1, 2025, and January 1, 2029, with $1,000. The money would be placed in a special investment fund called a “Trump account.”
Under the proposal, the $1,000 would be invested in financial markets, and children could access the funds later in life for approved expenses such as college tuition or buying a home. Parents or other individuals would also be allowed to add their own money to the accounts.
The bill is part of a broader Republican fiscal package aimed at promoting financial growth and opportunity among future generations. However, critics argue that the political branding and limited tax benefits may reduce the effectiveness and appeal of the program.
The original version of the bill called these savings vehicles “MAGA accounts,” referring to former President Donald Trump’s political slogan, “Make America Great Again.” However, lawmakers recently updated the bill to make the political branding more direct, renaming them “Trump accounts.”
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Despite the upfront benefit of a government-funded investment, some tax experts are questioning how the accounts would work. Contributions would have to come from post-tax income, and any investment gains would be taxed when withdrawn. This structure resembles a standard investment account rather than a tax-advantaged option like an IRA or health savings account.
