The Wall Street Journal reported, “Treasury Will Auto-Enroll 60 Million Children in Trump Accounts.” I guess they got tired of waiting for corporate media to tell parents how they can get their kids free investment accounts that, for many of them, would be preloaded with thousands of dollars of stocks.
There are so many companies wanting to donate to Trump Accounts that they had to automate the signup process. “Stakeholders have expressed that eligible donors prefer that their contributions reach all children, not just children whose parents have the awareness to opt in,” the program’s new rules explained.
Why don’t parents ‘have awareness’ of how to opt in? Ask your corporate media.
But never mind! Switching to automatic enrollment will let assets in those accounts start growing now, without families needing to do anything, explained Jin Huang, a Washington University professor. “This is the most important design change since the law passed,” he said. “This is huge.”
Since the program’s July launch, only 7 million kids have signed up, with over 65 million kids whose parents are leaving money on the table. Treasury is fixing that. As soon as this week. (A month before midterms.)
The new rules also expand the program in key ways. Money in Trump Accounts can only be used to buy low-cost index funds, which are baskets of stocks mirroring the overall market, and are considered the lowest-risk type of stock investment. But Treasury just announced that people and companies may donate other types of stock directly into the accounts, so long as Trump Account funds aren’t used for the purchase. So, for example, SpaceX could give every American child a share in the company.
CLIP: CNBC explains the new auto-enrollment of kids in free stock accounts (0:30).
This answers one of the critics’ biggest complaints: that the accounts aren’t flexible enough. Don’t worry though! Critics, who love whining about the “K-shaped” recovery where only investors benefit, quickly pivoted to complaining about the risk of owning individual stocks. “It undermines the entire purpose of the regulated index fund requirement, which is stability,” groused Nina Olson, executive director of an NGO called the Center for Taxpayer Rights. “Let’s say someone donates a bunch of tech stocks and then we have another dot-com meltdown, so that you end up with worthless stocks. How does that help the child?”
Treasury said several donors are ready to make stock contributions on the scale of Dell’s but prefer not to donate cash. The Journal explained that these types of donors can avoid capital-gains taxes, get an income-tax deduction, and push assets out of taxable estates. Win-win. Treasury further explained, “Donors are attracted by the hope that a stock contribution with a five-year holding period may lead recipients and their families to feel that they have a stake in the fate of the corporation to a greater extent than if the child’s holdings of the corporation were only through an index fund.”
President Trump has done more for the children than any administration in American history. Plus— sixty million new market investors will begin lifting the overall stock market even higher without inflation. Tired of winning yet?
