7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
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What experts think about the $1,000
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 306 points 4 hours ago* (last edited 13 minutes ago)
Here is what some people missed about it: - annual
contribution of 5k - capital rate distribution for kids.
May I remind you up to 48k of income the rate is
0%. Meaning the kid can withdraw from this account
tax free for college - and lastly free rollovers from
qualifying trusts
[–] emceter
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7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
This is just a scheme for wealthy people to set their
kids up with an extra account that they can use after
18 years of compounding. The kid can use it to pay fo
their college or downpayment on a house.
Now you can say ”but 529 plans are used for college”,
except they are now expanded to also be used for
elementary or primary schools. Meaning parents can
get a tax deduction for what they were already doing,
which is paying for private school, while setting aside
more for future and getting an additional tax deductio
of 5k per kid.
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This is just a scheme for the wealth divide to be even
larger down the road
Edit: since this comment has gathered support I’ll
happily provide rebuttals for some criticisms I saw.
For anyone saying ”what is bad with incentivizing
people to save for their kids future”: - very simple,
there is no incentive for low income households. As I
was corrected, the only households that will participat
are upper income who have spare money to set aside
How you truly incentive this is by setting up a match
system. If your household income is below 100k AGI
government provides you a credit or additional match
to the kids account. Etc, there is none of that. The onl
incentive there is for families with financial
responsibility and means to further their advantage
over others.
For anyone saying I’m against this idea: - I am
absolutely not. I will fully fund this account for my kid
every single year and let it grow while maxing their
529s. I have the means to be able to do this and it’s
not a point of bragging but making people realize my
standing. I am just upset that it’s written so poorly to
only really provide an inside an incentive to wealthy
folks who already have the means to set their kids up,
but this provides a tax advantaged way for the kids
further increasing the wealth divide snowball.
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 75 points 3 hours ago
Contributions aren't tax deductible. They're tax
deferred. And all withdrawals are taxed, unlike
with 529s.
[–] mulemoment
It's basically the same thing as a UGMA.
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[–] emceter
 32 points 3 hours ago
https://old.reddit.com/r/Economics/comments/1lsc2h0/what_experts_think_about_the_1000_trump_accounts/
2/8
7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
I agree, you are right, there is no deductio

”c) Treatment of Contributions.-(1) No deduction allowed.--No deduc
2) Contribution limit.--In the case of any co
year in which the account beneficiary attai
And you are correct on the tax part technic
gains tax rate from 0-48,000 of income is
simply withdraw ~50k a year from this acc
5 years of college.
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 4 points 2 hours ago
Are they exempt from the kiddie tax?
[–] jstorz
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 [score hidden] 5 minutes
Yes, it's tax deferred so there's no
withdraw, which they can't do until
for qualified expenses.
[–] mulemoment
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 18 points 3 hours ago
$2500 when paid by an employer will not be
and will be expensed by the employer. This w
self-employed people will children.
[–] holymole1234
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 [score hidden] 56 minutes ago
They need to stop writing tax legislation
member small biz owners.
[–] ktaktb
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pare
 [score hidden] 30 minutes ago
And in effect a tax on the childless. I love
idea of using tax breaks that incentivize
this is specifically an incentive for the "ri
[–] bfeils
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 2 points 2 hours ago
Came here to say the same thing. I already d
maybe I missed a few things
[–] 6158675309
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[–] blahblah98
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 63 points 3 hours ago
https://old.reddit.com/r/Economics/comments/1lsc2h0/what_experts_think_about_the_1000_trump_accounts/
3/8
7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
The accounting is insane - food, housing, clothes & su
Xmas/birthday presents for the kids? All from the tax
receipts & keep a spending log for tax reporting.
Yeah right, no chance of abuse here.
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 35 points 3 hours ago
President slush fund creates another slush fun
[–] makemeking706
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 -4 points 3 hours ago
Guess you missed the part: “Distributions are
[–] MalikTheHalfBee
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 17 points 3 hours ago
Which will likely be zero for these kids in c
[–] shoeperson
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 -2 points 2 hours ago
Long term capital gains are flat 15% t
have no income? Or is the loophole to
term nd tax at a marginal rate of 0 as
[–] meltbox
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 [score hidden] an hour ago
If you have 0-48,000 the tax rate
with no job can draw that much t
[–] emceter
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 [score hidden] 56 minutes ago
Guess you missed the part where you are
[–] ktaktb
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[+] Dangerhamilton
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 comment score below threshold (18
 9 points 2 hours ago
It's not a terrible idea. The costs here seem low fo
saved by these baby accounts, but it does create a
future administrations. Imagine a progressive here
you gave every baby like 10K/year, it would only a
every kid would start college (or life) with a $25K s
that much, but it could make a big difference for p
also introduce a progressive structure into the cont
alleviate some of the equity problems.
[–] kennyminot
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The BBB has a bunch of shitty components, but I d
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4/8
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What experts think about the $1,000 'Trump accounts' for babies : Economics
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[–] CHOLO_ORACLE
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 [score hidden] an hour ago
25k will cover a single semester for them kids
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 [score hidden] 5 minutes ago
$25k invested when a kid is born will abso
semester of college after 18 years of comp
contributions.
[–] ScienceWasLove
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 [score hidden] 25 minutes ago
I wouldn't disagree if you were just pointing out th
entry for the support to prevent helping people wh
[–] The-Magic-Sword
But being able to find a 'spare' 5k (up to 5k) a yea
college isn't really where you'd put the demarcatio
American household makes 78k.
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 10 points 3 hours ago
given that this administration just obliterated feder
anyone thinks kids are going to college in the futur
50k
[–] GeneriComplaint
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[ ] 7 points 2 hours ago
I mean it is more a scheme to separate the upper
poor, but 529s are also regressive. We should reall
giving tax breaks to people rich enough to save/inv
college tuition was more affordable and primary/se
districts, there wouldn't be such a need for educati
[–] bandito143
Something something social democracy, Scandinav
now.
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 3 points 2 hours ago
Basically a voucher program without making it a vo
[–] OK_x86
Just another way to funnel money away from the p
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 [score hidden] an hour ago* (last edited 56 minutes ago)
This is just a scheme for wealthy people to set th
that they can use after 18 years of compounding
college or downpayment on a house.
[–] jtmn
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5/8
7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
Yea, incentivising lower income to save for their child
scheme. wtf are you talking about? Sure it will help p
marginally, but it will help people who struggle with t

You're so bent on spiting the devil, you'll damn the w
Edit: To be more clear.
A 48k 0% capital gains loophole after 8-10 years of c
family.
A 48k 0% capital gains savings for a blue collar family
contribution is a huge benefit.
I'm guessing whoever is agreeing with this OP didn't
help with their college funds.
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 1 point 2 hours ago
Yep. If it wasnt, they would be trying to strengthen
instead of tearing them down.
[–] Long-Blood
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 [score hidden] 15 minutes ago
How you truly incentive this is by setting up a m
income is below 100k AGI government provides
the kids account.
[–] BlueRoller
Why would we want to increase inflation further wi
matching contributions. There's nothing wrong with
parents want to do that.
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 1 point 3 hours ago
It's rich people only?
[–] Tierbook96
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 9 points 2 hours ago
"One solution Boshara sees: Give the treasury secretary the authority to define and create
these accounts, rather than Congress trying to work out all the details."
[–] wirthmore
That sounds like a Major Question. In Loper Bright v Raimondo
, the Supreme Court limited
the ability of the Executive Branch to determine the best way to implement regulation without
explicit instructions from Congress, on issues like: "Is the Executive the same political party as
the majority of Supreme Court Justices?"
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 37 points 3 hours ago
< > discussions in r/Economics
The $1000 Trump account is a joke. 529 accounts can also transfer a balances to other
children and a $35k balance to a Roth IRA.
[–] No-Situation7964
X
529 plans can be front loaded and then each wealthy grandparent can transfer 14K per year.
$1000 is jump change even for people who have nothing.
https://old.reddit.com/r/Economics/comments/1lsc2h0/what_experts_think_about_the_1000_trump_accounts/
6/8
7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
Remember most families do not even have $400 for an emergency fund now they cannot even
afford health insurance.
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 5 points 3 hours ago
The original plan was for it to be post-tax contributions. Similar to a personal brokerage
account. The difference being the money sits and compounds and potentially can be traded
without tax implications. The only tax benefit is if it gets withdrawn at the 0% tax bracket for
LTCG. But that can also be the case for a personal brokerage account, if you buy VOO (or brk
which has no dividend) and hold for 30 years and then withdrawal in a year when you have no
income the first 48k of gains is tax free. You can do that on a year when you are between jobs
or during retirement.
[–] -OptimisticNihilism-
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 [score hidden] an hour ago
IMO, the accounts are a fine idea but $1k seed money is nothing. If nothing else is put into it,
it will maybe be worth 3-4k in 18 years. Families that can save money for their kids already
have other tax-advantaged vehicles. The administrative costs for this program will be
relatively substantial, not to mention...this White House doesn't have a great record of
successfully rolling out nationwide programs.
[–] I_Enjoy_Beer
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 4 points 2 hours ago
So a “money” baby basket? I look forward to all the news criticizing this as socialism and
communism! Oh wait, something’s (d)ifferent, I just can’t put my finger on it
; is it Wall
Street salivating over a new investment vehicle? Hmm…
[–] keytiri
🤔
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[+] Superb_Raccoon
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 comment score below threshold (0 children)
 13 points 3 hours ago
It’s a useless idea for it’s purpose- to encourage more babies to be born. It might be worth a
months rent when the kid turns 18 so it might help a teeny amount for the young adult.
[–] Ketaskooter
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 [score hidden] 45 minutes ago
It's a genius idea for getting support from idiots who think 1K will make a difference at
all. They will point to it and say Trump is taking care of their children.
[–] Hagridsbuttcrack66
These people are so fucking dumb, this is the only thing out of this entire bill they will
likely understand.
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[+] [deleted] 3 hours ago (1 child)
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 [score hidden] 34 minutes ago
Lmao, sure it is I pumped into the government. They found 1400.00 a person during Covid.
Give it back to the kids. The amount of money the feds will make off of accrued interest and
[–] Dangerhamilton
https://old.reddit.com/r/Economics/comments/1lsc2h0/what_experts_think_about_the_1000_trump_accounts/
7/8
7/5/25, 12:21 PM
What experts think about the $1,000 'Trump accounts' for babies : Economics
capital gains taxes will be nuts in 18-21 years.
The bottom line is 250k at 18 is a game changer for many people. The best part can manage
what accounts and talk to my kids about investing.

Lmao are you an accountant or an economist?
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[+] reddit_user13
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 comment score below threshold (0 children)
 [score hidden] 17 minutes ago
I have to wonder why there is not a Social Security Number requirement like there is with the
Child credit on the tax form. Seems like a weird oversite.
[–] TheGoodCod
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