While the White House is eager to move forward with the plan, reaction to it is divided.
The White House’s argument is that Trump accounts provide a path to stock ownership for millions of children in the US, which they say has historically been “unevenly distributed, leaving many households – particularly young and low-income families – with little or no risk”.
However, Will McBride, chief economist at the Tax Foundation think tank, says the scheme is too complex to sign up to, which in his view will “benefit a minority”.
He suggests that those who will benefit will be parents of children who are “relatively well-informed, relatively affluent, relatively adaptive.” [and] Let their work be together”.
However, Andy Blocker, head of policy, regulatory and government relations at financial services firm Edward Jones, believes a $1,000 contribution for children born during Trump’s second term in office would overcome “the barrier of having nothing to start with.”
“If by the end of the year more families have a clear path to start saving and investing for their children’s financial future, that’s a success,” he suggests.
Adam Mitchell, director of tax policy studies at the Cato Institute, says the idea of the plan is admirable, but cautions that it “may not live up to the rhetoric.”
He says the main benefit is the $1,000 seed subsidy, but he suggests many families would be better off using existing savings accounts.
He also pointed to barriers such as penalties for early withdrawals like other savings accounts, adding that low-income children may be forced to withdraw money when they turn 18 to “help make ends meet”, and therefore face penalties. “The Trump accounts don’t fix that problem.”