WASHINGTON (AP) — As children from wealthy families reach adulthood, they often receive the massive benefits of their parents in the form of trust funds. It’s another way they step into their lesser wealthy companions, and they may not receive anything – or even expect to support their families.
But what if every child can get financial boost when they turn 18, regardless of their family situation?
That’s the idea behind it House GOP proposal Supported by the president Donald Trump. This will create an account for all babies born in the US over the next four years and earn $1,000 to earn interest until the children reach adulthood. At 18, they withdraw money to start a home, education down payment, or small business. If money is used for other purposes, it is taxed at a higher rate.
It is based on the concept of “. Baby bondtwo states, California and Connecticut, and the District of Columbia. Reduce the gap Between the wealthy and the poor.
Rep. Blake Moore, a Utah Republican, led an effort to put the initiative into a massive House spending bill. in op-ed For Washington examiners, he said wealth inequality has soured many people with capitalism. “Trump’s explanation” could be an antidote, as suggestions call them, he said.
“We know that the American economic engine is working, but not everyone is leading to its value and how it benefits them,” Moore writes. “If we can demonstrate the benefits of investment and financial health to the next generation, we can put them on the path to prosperity.”
The bill requires investment companies to handle the money.
The bill requires at least one parent to create a Social Security number with a work permit. This means that children of US citizens born into several categories of immigration will be excluded from profit. However, unlike other baby bond programs, which are generally aimed at underprivileged groups, this will be available to all income families.
“When a little baby is born, they start with a thousand dollars. If we do a good job investing their money, we’re going to go to one of our investment guidelines. “It’s going to be so cute to see.”
Darrick Hamilton, the economist at the new school who first proposed the idea of baby bonds a quarter century ago, said the GOP proposal would worsen, rather than reduce, the wealth gap. He envisioned a program that was universal, but gave children from poor families greater donations than their wealthy peers to level the arena. Money is handled by the government, not by the private companies on Wall Street.
“Upside down,” Hamilton said. “It will reinforce inequality.”
Hamilton added that $1,000 is of interest, but it’s not enough to make a big difference to children living in poverty.
Bradgarstner, a Silicon Valley investor who created the blueprint for the proposal, said in an interview with CNBC last year that the account will help address the loss of faith in capitalism, representing the existential crisis in the United States.
“The rise and fall of the country happens when you have a gap in wealth when you have people who lose faith in the system,” Garstner said. “We’re not agents. We can do something.”
The proposal comes as Congressional Republicans and Trump face backlash from proposed cuts in programs that poor families with children rely on, such as food aid and food aid. Medicaid.
Even those who support the idea of baby bonding have pointed out that Trump wants to cut down on higher education grants and programs that support adult sloping youth. Pending federal laws will reduce Medicaid and food and housing aid that many families with children rely on.
Young adults who grew up in poverty often struggle to cover basics such as rent and transportation. This failed to cover the costs Trump’s account couldn’t cover, said Eve Valdez, advocate for foster parents in Southern California.
Newborn accounts that have no access for 18 years mean little to any family struggling to meet today’s basic needs, said Simica Gaskin, California’s ultimate child poverty.
“We can provide health care for our kids. Families have access to snaps and food is what we need… the country is focused,” Gaskins said.
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