U.S. Budget Negotiations

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But signs are that the bill will pass and go to the Senate, which intends to to revise it before voting on it, so we won’t really know the outcome until Senate passage and reconciliation… but we’ll know the contours.
 

Bill Would Give Newborns $1,000 in ‘Trump Accounts’​



“…
The original draft called for the funds to be put into new a “money account for growth and advancement,” or, as the bill suggested they be called, a “MAGA account.”

Apparently, though, endowing the accounts with the name of President Trump’s political movement was not clear enough. As part of a series of last-minute changes House Republicans made to their broad fiscal package Wednesday night, they decided to just cut to the chase. The money would now be deposited in a “Trump account.”

Under the bill, children born between Jan., 1, 2025, and Jan. 1, 2029, would receive the money, which would be invested on their behalf in financial markets. Once they had grown up, they could withdraw the proceeds to pay for certain expenses, including going to college or buying a house. The child’s parents, or other third parties, could also contribute [after-tax] to the account.…”
 
nycfan said:

Bill Would Give Newborns $1,000 in ‘Trump Accounts’​



“…
The original draft called for the funds to be put into new a “money account for growth and advancement,” or, as the bill suggested they be called, a “MAGA account.”

Apparently, though, endowing the accounts with the name of President Trump’s political movement was not clear enough. As part of a series of last-minute changes House Republicans made to their broad fiscal package Wednesday night, they decided to just cut to the chase. The money would now be deposited in a “Trump account.”

Under the bill, children born between Jan., 1, 2025, and Jan. 1, 2029, would receive the money, which would be invested on their behalf in financial markets. Once they had grown up, they could withdraw the proceeds to pay for certain expenses, including going to college or buying a house. The child’s parents, or other third parties, could also contribute [after-tax] to the account.…”
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Good grief. Pure vanity to Trump. This will cost around 4 billion extra a year just to get his name on it.

And just what we need, another account or tax issue to keep up with. I assume the investment earnings will be tax free? Parents can't tap into it?
 
BlueSmoke said:
Good grief. Pure vanity to Trump. This will cost around 4 billion extra a year just to get his name on it.

And just what we need, another account or tax issue to keep up with. I assume the investment earnings will be tax free? Parents can't tap into it?
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No and maybe/mostly no. The earnings will be taxed on withdrawal, so this is not a tax advantaged account, but hey it is juiced with a $1,000 deposit. Parents can tap into it but I’ve seen conflicting details on the conditions for parents to use the funds for the minor child.
 
nycfan said:
No and maybe/mostly no. The earnings will be taxed on withdrawal, so this is not a tax advantaged account, but hey it is juiced with a $1,000 deposit. Parents can tap into it but I’ve seen conflicting details on the conditions for parents to use the funds for the minor child.
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“…
  • Beneficiaries would pay long-term capital gains tax rates, which are far lower than the tax rates on regular income, if the money goes to qualifying expenses like education or a mortgage.
  • It's less beneficial than a 529 plan, in which withdrawals are tax-free for a variety of educational expenses, and whose contributions might be eligible for state income tax deductions. …”
 
nycfan said:
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I don't know why anyone thought they wouldn't eventually get this done. When have Congressional Republicans stepped up and done the right thing almost anytime in the Age of Trump? As long as Dear Leader wanted this to pass it was going to. Although losing those three elderly Democrats who passed away this session didn't help. And although there will be some revisions in the Senate it will almost certainly pass there too once Dear Leader starts leaning on them to get it done. I can already see and hear Susan Collins expressing her "deep concerns" and furling her brow while she votes to pass whatever budget deal they put before her.
 
Mulberry Heel said:
I don't know why anyone thought they wouldn't eventually get this done. When have Congressional Republicans stepped up and done the right thing almost anytime in the Age of Trump? As long as Dear Leader wanted this to pass it was going to. Although losing those three elderly Democrats who passed away this session didn't help. And although there will be some revisions in the Senate it will almost certainly pass there too once Dear Leader starts leaning on them to get it done. I can already see and hear Susan Collins expressing her "deep concerns" and furling her brow while she votes to pass whatever budget deal they put before her.
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Agree, but the challenges are not over. The Senate version will almost certainly blow up the deficit even more, and it's not clear what will be too much for the hardliners in the House. I do agree with you they'll eventually get something done because they're all so afraid of being primaried from the right, but it's going to take a while still.
 
  • The Tax Cuts and Jobs Act (TCJA) of 2017 included many provisions that are set to expire after 2025, especially for individual income taxes (like lower rates, the larger standard deduction, child tax credit changes, etc.).
  • The CBO assumes these individual tax provisions will expire on schedule, meaning that in its baseline, taxes for individuals will rise starting in 2026.
  • Therefore, any proposal to extend or make those provisions permanent is treated by the CBO as a new tax cut (because it's cutting taxes relative to the current law baseline).
 
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