\n<\/p>\n
While the White House has been keen to push the scheme, reaction to it has been split.<\/p>\n
The White House’s argument is that Trump Accounts offer millions of children a way into stock ownership in the US, which it says has historically been “unevenly distributed, with many households – especially younger and lower\u2011income families – having little or no exposure”.<\/p>\n
However, Will McBride, chief economist at the Tax Foundation think tank, says the scheme is too complicated to sign up to, which will lead, in his view to a “minority that benefits”.<\/p>\n
He suggests those that will take advantage will be the parents of children who are “relatively well-informed, relatively well-off, relatively tuned in [and] have their act together”.<\/p>\n
However, Andy Blocker, head of policy, regulatory and government relations at financial services firm Edward Jones, believes the $1,000 contribution for babies born during Trump’s second term in office will remove a “barrier of having nothing to start with”.<\/p>\n
“If by year-end more families have a clear on-ramp to begin saving and investing for their children’s financial futures, that’s success,” he suggests.<\/p>\n
Adam Michel, director of tax policy studies at the Cato Institute, says the idea of the scheme is admirable, but warns it might “not live up to the rhetoric”.<\/p>\n
He says the main benefit is the $1,000 starting subsidy but suggests many families would be better off using existing savings accounts.<\/p>\n
He also points out barriers such as penalties for early withdrawal, as seen for other savings accounts, adding that lower-income children may feel compelled to take the money out when they turn 18 to “help make ends meet”, and therefore have to pay a penalty. “Trump Accounts do not fix that problem.”<\/p>\n<\/div>\n