CounterPunch Exclusives

CounterPunch Exclusives

Trump Accounts Are a Sick Joke, Not a Threat to Social Security

Image Source: https://trumpaccounts.gov

Many of the Trump crew seem to be delusional about Trump accounts. They claim to believe that they will replace Social Security. It shouldn’t be a surprise to us that many supporters of Trump are out of touch with reality, but that is not a reason for the rest of us to take their nonsense seriously.

Let’s keep our eyes on the ball. This is not 3-dimensional chess; it is an account for newborn kids in which the government deposits $1,000. Parents or other relatives can add to it each year, like they can add to an education savings accounts in most states. The amount people contribute to the account is deducted from their taxable income. Also, the money accumulated in the account is not taxed until it is withdrawn.

Some people take advantage of these accounts; most don’t. The reason is that most people don’t have an extra $1,000 or $5,000 or whatever to contribute to these accounts. Furthermore, the tax benefit is not a very big deal to most moderate and even middle-income people.

The overwhelming majority of households are in the 12% bracket or below. More than a fifth are in the zero bracket, meaning they pay no income tax and would get no benefit from tax-advantaged accounts.

Furthermore, even if they wanted to put money in a tax-advantaged account, why would they choose a Trump account rather than an education savings account or an IRA? Money in existing tax-advantaged accounts can be withdrawn, albeit with a penalty. Money in a Trump........

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