Summary
A new program called "Trump Accounts" offers tax-advantaged investment accounts for U.S. children, with funding from both the government and private donors like Michael and Susan Dell. The program aims to help children financially as they grow, but challenges with bureaucracy may limit its success. Similar programs have faced problems with low participation due to complicated processes.
Key Facts
- Trump Accounts are new investment accounts for U.S. children, created in 2023.
- Michael and Susan Dell pledged $6.25 billion to support these accounts, giving $250 each for 25 million children.
- The federal government plans to add $1,000 to accounts for babies born between 2025 and 2028.
- Accounts open to contributions in 2026, with funds available in adulthood for education, housing, or starting a business.
- Criticisms of the program include concerns about bureaucracy, which may prevent eligible families from claiming the benefits.
- Similar programs have faced challenges worldwide, with many eligible people not claiming available funds.
- The accounts function under Internal Revenue Code §530A, similar to IRAs, with annual contribution limits and low fees.
