Although the White House has actively promoted the scheme, reactions to it have been divided.
The White House’s argument is that Trump’s accounts offer millions of children the opportunity to own U.S. stocks, which it said have historically been “unevenly distributed, leaving many households – especially young, low-income families – with little or no exposure.”
But Will McBride, chief economist at the Tax Foundation think tank, says the scheme is too complex to sign up to, which he believes will result in “a minority benefiting.”
He suggests that the benefits will be reaped by parents of children who are “relatively well-informed, relatively well-off, relatively determined (and) cooperative.”
But Andy Blocker, head of policy, regulation and government affairs at financial services firm Edward Jones, said a $1,000 contribution for children born during Trump’s second term would remove “the barrier of not having a place to start.”
“If by the end of the year more families have a clear opportunity to start saving and investing in their children’s financial future, that will be a success,” he suggests.
Adam Michel, director of tax policy research at the Cato Institute, says the idea behind the scheme is admirable, but warns it may “fail to live up to the rhetoric.”
He says the main benefit is the $1,000 start-up grant, but suggests many families would be better off using existing savings accounts.
He also points to barriers such as penalties for early withdrawals, as seen with other savings accounts, adding that low-income children may feel pressured to withdraw money when they turn 18 to “help make ends meet” and therefore have to pay a penalty. “Trump accounts don’t solve this problem.”