Prosperity Now Applauds Senator Booker and Representative Pressley for Bill to Help Close the Racial Wealth Divide
For Immediate Release Contact: Kristin Lawton, 202.207.0137
Prosperity Now applauds today’s announcement by Senator Cory Booker (D-NJ) and Representative Ayanna Pressley (D-MA) of the reintroduction on the American Opportunities Accounts Act, which would work to reduce wealth inequality and the racial wealth divide by making intentional and substantial investments in the futures of American children.
Building on an idea developed and long-championed by economist Darrick Hamilton and William “Sandy” Darity Jr., the American Opportunities Accounts Act would give every child born a fair shot at the American Dream by providing them up to $45,000 to invest in wealth-building opportunities, such as higher education or homeownership.
“By providing an investment and source of wealth to leverage for their future starting at birth, the American Opportunities Accounts Act would help to ensure that all children, especially those that come from families with limited resources, have a level playing field ahead of them to achieve economic prosperity.” said Andrea Levere, President of Prosperity Now, “Prosperity Now applauds Senator Booker and Representative Ayanna for their leadership in addressing economic and racial wealth inequality, two of the greatest challenges of our time.”
By reforming the preferential treatment given to capital gains and estates through the tax code, and thus ensuring that the wealthy pays their fair share, the American Opportunities Accounts Act would provide every child, starting at birth, an American Opportunities Accounts in their name with an initial investment of $1,000. Every year after that point, up until the child turns 18, the accounts would be augmented through automatic, yearly investments of up to $2,000, with those from lower income households receiving higher annual deposits.
For children that come from our lowest income-earning households, the investments made by the American Opportunities Accounts Act could total as much as $34,000 by their 18th birthday. With interest, this could grow into a nest egg of more than $45,000, which the child can then use to access long-term wealth building opportunities, including higher education and homeownership.
Given that four out of every 10 households in the country lack the resources to deal with a long-term financial emergency, and that the wealth of households of color ($19,790) is a fraction of the wealth of White households ($127,390), the American Opportunities Accounts Act would not only put us on the path to addressing these problems, it would ensure that every child has the resources they need to achieve their future aspirations as soon as they are born.
Prosperity Now believes that everyone deserves a chance to prosper. Since 1979, we have helped make it possible for millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and, ultimately, prosperity. We offer a unique combination of scalable practical solutions, in-depth research and proven policy solutions, all aimed at building wealth for those who need it most.