Last week, at a White House meeting with Uber CEOs, Joldman Sachs and Salesforce, Donald Trump described “a pro -family initiative that will help millions of Americans harness our economy’s power to raise the next generation.” He was referring to a ruling on the draft tax spending and spending that the Republicans paid in the House of Representatives in May, which would establish investment accounts imposed on taxes for every child born in the United States during the next four years, as the federal government contributed a thousand dollars in each of them. Parliament Speaker Mike Johnson, who was also present at the White House meeting, described the proposal as “bold, transformative.”
It can be described more precisely as an attempt to put lipstick on a pig. As everyone knows, definitely now, the draft law of the House of Representatives-which is called a single beautiful bill-is stuffed with tax cuts for companies and the wealthy, and suggests reducing financing for medical assistance, food assistance and other programs targeting low-income Americans. The new investment account proposal has not changed the very retrospective bill. According to a report issued by the Congress Budget Office, at all, the provisions of the draft law, including the new accounts, will reduce the financial resources of families in the tenth of the distribution of income by about sixteen dollars per year compared to the basic scenario, and raise the resources of families at the top tenth by about a thousand dollars per year. In other words, it is the reverse hood bill.
New savings compounds also proposed by Republicans. Johnson and other republicans are trying to promote them as supporters of workers, and some media accounts have described them as “ties for children”. But the proposal is not like a little with one of the same name that some progressive economists and Democrats were promoting for years, as a way to address wealth differences in America. Given the way the Republican Plan is organized, the current disparity may end instead of helping to eliminate it.
Stopping children with some wealth to help give them an appropriate start in life is not a new idea, of course. Rich families create confidence boxes, in one way or another, for several centuries. But what about children in families that have a slight or no wealth to deliver it? (According to the Federal Reserve, in 2022, the average net value of families was in ten percent of the distribution of wealth one dollar.
In 2010, economists Drek Hamilton, who is now working in the new school, and William Daryti Junior, from Duke, explained a plan to create government accounts carried on children who were born in families less than average net value. Under the Hamilton-Doriti plan, the average value of these government contributions, which they described as “children’s ties”, will gradually increase to nearly twenty thousand dollars, with children from the poorest families benefit more. Adding the benefit that accumulates in these accounts over the years, according to Hamilton and my jar that some of these children may end up with more than fifty thousand dollars by the time when they reached adulthood.
Although children’s bonds will be distributed on a blind basis, the fact that black families, indigenous and Latin population were (an illusion) that is not proportional in the low areas of wealth distribution, the plan would have been benefiting from their children-with an influence associated with the racist wealth gap. (In 2022, according to the scanning numbers received from the Federal Reserve, the average wealth of black families amounted to $ 44,890, compared to $ 285,000 for white families.) In fact, Hamilton claimed that their suggestion “could come a long way towards” eliminating the transmission between generations of racist and treatment.
This proposal has never been implemented. But a copy of it lived in the form of legislation proposed by Cori Booker, Democratic Senator, in 2018, and then re -presented, in 2023, by Booker and actor Ayana Presley. Under the Booker-Persley bill, all American children will be granted at birth an investment account funded to the public worth one thousand dollars, and the government will make more payments in these accounts annually according to family income. When the owners of the eighteenth accounts, they are allowed to use money for some specified expenses, including buying a house or helping to pay the college price. “Children’s ties are one of our most effective tools to close the racist wealth gap,” Persley commented on the suggestion of the legislation.
On the Republican side of the corridor, some politicians and policy analysts support the special savings accounts that taxes have long been offered as a way to encourage socialist savings and monotheism. But only recently, the party has reached the idea of planting these accounts with public funds. Roj Sinator Texas Ted Cruz under the title “America’s Investment”. In the draft law of the house, it was renamed as “Maga The account “, with an abbreviation in favor of” money account for growth and progress “. Republicans renamed the Trump account at the last minute.
Politically, Cruz may be right: during Corona virus diseaseDirect federal payments have proven popular among voters (Trump insisted on putting his name on checks as well). But socially and economically, the Republican proposal will be less effective. Darik Hamilton told me last week: “It’s upside down,” Darik Hamilton told me last week. “It is up to additional support for the wealthy, which can already save in the first place.”
The details of the suggestion are confirmed by Hamilton. Money must be placed in the new Trump accounts in the low -cost stock index fund, and investment gains will be allowed to collect taxes free of taxes until the money is used. Parents and others will be allowed to supplement the original government endowments with a thousand dollars with contributions of up to five thousand dollars per year. But it is clear that poor families will not have the means to provide accounts. “This means that the poorest families that do not save will get $ 1,000 of more than 18 years, while rich families will be able to invest up to $ 90,000,” wrote Stephen Nunez, an analyst at the Roosevelt Institute, in an article on the Republican Party plan. “This will expand the wealth gap.”
There are other issues as well. It is not clear that banks or brokerage firms will be ready to manage new accounts without imposing huge fees that would exhaust them. Some financial experts say that most families will get better returns by contributing to the plans of 529 of the college. (The limits of contributions to 529 are higher plans, and in many states are not subject to state taxes. (At the White House meeting last week, Michael del, CEO of Dell, said that the company will be ready to match government contributions.) But these are only suggestions, and it is difficult to avoid the conclusion that the entire project is largely an attempt to turn attention from the true nature of the Republican economic soldiers.
