By Hamza

On May 12, 2025, House Republicans unveiled a new draft of a sweeping tax bill championed by former President Donald Trump. A notable inclusion in the bill is a pilot program aimed at establishing ‘MAGA Accounts,’ essentially savings accounts for children, each seeded with a one-time $1,000 deposit.

The ‘MAGA Accounts,’ short for ‘Money Account for Growth and Advancement,’ are designed to encourage financial savings from a young age. Republican Senator Ted Cruz of Texas has been a vocal supporter of the initiative, advocating for the accounts during a recent GOP retreat. Speaking to Semafor, Cruz emphasized the long-term impact of the accounts: “The case I made to my colleagues is: We should ask ourselves in this bill, what will be the legacy that people will remember and talk about 10 years from now, 20, 30, 40 years from now?”

According to the draft, the MAGA Accounts will be exempt from taxation, providing an opportunity for young Americans to begin accumulating savings that can grow through compound interest. To qualify for the program, children must be U.S. citizens “at birth,” possess a Social Security number, and have a birthdate between December 31, 2024, and January 1, 2029.

The proposal bears similarities to the ‘baby bonds’ initiative put forth by Democratic Senator Cory Booker of New Jersey during his 2020 presidential campaign. Booker’s plan aimed to grant $1,000 in savings accounts for U.S. newborns to help them establish a financial foothold early in life. Democratic Representative Ayanna Pressley of Massachusetts also backed the baby bonds proposal as a measure to address the racial wealth gap.

With the launch of the MAGA Accounts Contribution Pilot Program, Republicans aim to position this initiative as a cornerstone of Trump’s economic agenda, potentially shaping the financial futures of a new generation of Americans.

FAQs

  • What is a MAGA Account? – A savings account for kids that includes a one-time deposit of $1,000 and is exempt from taxation.
  • Who qualifies for a MAGA Account? – U.S. citizens born between December 31, 2024, and January 1, 2029, who have a valid Social Security number.
  • How can the $1,000 be used? – The $1,000 can be invested and allowed to grow through compound interest, potentially creating a financial foothold for the child.
  • How is this different from Baby Bonds? – While similar in concept, MAGA Accounts are structured under a Republican-led bill and focus on broader financial growth, not solely wealth gap reduction.
  • Where can I learn more about compound interest? – Visit Digital Nomad Diary.