More Opportunities for the Next Generation
By Sen. John Thune
There’s almost nothing parents won’t do for their kids. From the moment they hand you that little bundle, your whole life becomes about giving them a better life. For many of us, that’s the essence of the American Dream: to give your children a better life than you had.
Last year, in the Working Families Tax Cuts, Republicans worked to make it easier for parents to set their kids up for success. This bill opens new education pathways, helps parents save for their kids’ education, and creates new investment accounts to empower parents to give their kids a nest egg for the future – money they can use down the road to get a head start on their American Dream.
Parents know that a good education is the foundation of their kids’ success. For decades, the 529 savings plan has been a powerful tool for parents to save and invest in their kids’ education. At first, 529s could only be used for college. Then, in 2017 Republicans expanded them to include K-12 expenses too. And in last year’s Working Families Tax Cuts, Republicans again expanded 529s so parents can use them for things like tutoring, vocational education, homeschool materials, and continuing education. And in addition to these new flexibilities, we doubled the amount that you can withdraw from a 529 account to $20,000 per year.
For postsecondary education, the Working Families Tax Cuts implements reforms and accountability measures to put downward pressure on the cost of college degrees. On top of those measures, it also makes permanent a policy I’ve long championed that allows employers to repay a portion of an employee’s student loans each year without the employee having to pay federal taxes on that income.
The Working Families Tax Cuts also creates a new Workforce Pell grant program, which supports students pursuing shorter-term training programs that prepare them for in-demand jobs. This promising new program began just this month, and I’m proud that South Dakota has begun working to identify programs in our state that will be eligible for the Workforce Pell program and will enable South Dakotans to seize new opportunities and strengthen our local workforce and economy.
In addition to supporting education, the Working Families Tax Cuts created Trump Accounts, a new tax-advantaged investment account designed to allow parents to save for their children’s future beyond their education: to give kids a nest egg, help them buy a home, or start a business. If they choose not to withdraw money once they reach adulthood, they can also use these accounts to kickstart their retirement savings. And to get savings started, parents can opt in for an initial deposit of $1,000 from the government for kids born between 2025 and 2028. Millions of Americans have already signed up their children for Trump Accounts, and parents can enroll their kids online or by downloading the Trump Accounts app.
As we celebrate 250 years since our nation’s founding, we’re especially mindful that America is a land of opportunity. The Working Families Tax Cuts helps create new opportunities and empowers the next generation to seize them and enjoy even greater success. The Working Families Tax Cuts is about our country’s future, and it’s helping to strengthen the American Dream for the next generation.
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