Democrats Propose ‘Baby Bonds’ in Wealth Redistribution Scheme

Although prices are proving to be stubbornly high despite the promises of President Biden and his party in Congress that the Inflation-Reduction Act would offer Americans relief, Democrats on Capitol Hill are suggesting billions of dollars in new taxes and spending, banking that earmarking it for infants will make it an easy sell.The American Opportunity Accounts Act is co-sponsored by a senator of New Jersey, Cory Booker, and a congresswoman of Massachusetts, Ayanna Pressley. The Democrats propose to award each newborn child in America a $1,000 “Baby Bond” and add $2,000 to the account each year at about 3 percent interest.In William Ross Wallace’s 1865 poem “The Hand That Rocks the Cradle Is the Hand That Rules the World,” he described the link into which governments have long sought to insert themselves. Under the new legislation, recipients would receive a gift from the nanny state when they turned 18 that would outstrip anything that parents of modest means could offer.Each year when the deposit is made to the Baby Bond — and when the big payday arrives — children will give thanks to government, courtesy of Congress signing the names of strangers into last wills and testaments alongside children and grandchildren of the deceased.“Baby Bonds,” Ms. Presley said, “are one of the most effective tools we have for closing the racial wealth gap and breaking the cycles of poverty and trauma that have prevented Black and brown folks from thriving in this country….” Mr. Booker — whose wealthy, IBM executive parents thrived “in this country” quite well, raising him in one of the nation’s most well-off suburbs — agreed.The bonds, Mr. Booker said, “would fix our broken tax code by providing every American child with startup capital for their life, and helping to drive down the wealth inequality that holds American families back from their full potential.”Conservatives and liberals both lament that those with lobbyists and armies of accountants enjoy an advantage in gaming the system to their advantage, and it’s common in Washington to declare something a politician doesn’t like “broken,” but all of this ignores that Congress writes the laws that govern us in the first place.That being the case, why not confront the larger problem instead of making children wait 18 years for relief as inflation eats away at their bonds’ value? It’s because tax reform isn’t a sexy topic for politicians, but showing up with a check in the maternity ward makes them heroes.Ms. Pressley’s statement cited the legislation’s “common sense reforms to federal estate and inheritance taxes, including restoring the estate tax to 2009 levels.” It’s clever political rhetoric, but if the bonds’ wisdom is self-evident, why must those with means be compelled to fund them?From time immemorial, the common-sense thing has been that parents get to decide where they bequeath the fruits of a lifetime spent working to build something for the next generation. The government stepping in to seize a portion of their wealth isn’t “reform,” it’s robbery.If the bill passes into law and a family farmer wishes to pass on the land to his children, the government will step in to ensure some of that nest egg is shunted off to the children of others. This will only incentivize them to safeguard their wealth, since human beings are dynamic.When the wealthy don’t sit still and pay the higher tax rate, Ms. Pressley’s description of the Baby Bonds as “paid for” will ring hollow, leaving taxpayers — as with so many similar programs in the past — on the hook to make up the shortfall long after the signing ceremony at the White House ends with the dolling out of ceremonial pens.Although reducing the wealth gap and expanding opportunity are worthy goals, choosing to offer relief to a select group two decades from now is more political stunt than panacea. If the tax code is the problem, Congress has the power to change it for everyone today, but unlike Baby Bonds, that wouldn’t make Big Government the hand that rocks the cradle.

Democrats Propose ‘Baby Bonds’ in Wealth Redistribution Scheme

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