‘Trump accounts’ promise to mint child millionaires. Experts have their doubts
Summary
President Donald Trump has introduced a program called “Trump accounts” that awards a one-time $1,000 deposit to every newborn whose family applies. The program is intended to help children save for their future, but many experts say the program’s benefits have been overstated, especially for lower-income families, and it may widen the wealth gap.Key Facts
- “Trump accounts” give a one-time $1,000 seed deposit from the federal government to every newborn whose family applies.
- The accounts are tax-deferred, meaning money grows without being taxed each year.
- President Trump claims these accounts can grow to $100,000 or more by the time children turn 18, even suggesting wealth as high as $1 million if the stock market does well.
- Experts say these growth estimates are unrealistic, especially for families who cannot add more money beyond the initial $1,000.
- Wealthier families can make annual deposits up to $5,000, which helps their accounts grow faster, increasing advantages over poorer families.
- Critics believe the program may increase, not reduce, the wealth gap between rich and poor.
- White House officials argue the program helps working-class families by giving them opportunities similar to wealthier families and say billionaires are donating money to support the accounts of low-income children.
- The program was launched in July 2024, amid low approval ratings and upcoming midterm elections.
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