Introduced as part of the One Big Beautiful Bill Act, the Trump Accounts will allow parents to contribute up to $5,000 per year to tax-advantaged savings accounts. For children born between 2025 and 2028, the federal government will automatically deposit $1,000, regardless of parental contribution.
Employers, state governments and philanthropists are also encouraged to add funds. According to the PBS NewsHour report, the idea has drawn attention not only for its scale but for the rare bipartisan support it has attracted across the political spectrum.
Wealth for Every Child, or for the Wealthy Few?
Supporters describe the accounts as a step towards a more inclusive economy. Tech entrepreneur Brad Gerstner, who helped make the concept a reality, said the goal is “to make everybody a capitalist from birth”, arguing that most Americans have been left out of wealth creation. According to Paul Solman’s report, the Dell Foundation’s donation, among the largest ever directed to American households, was intended to underscore the belief that investing in children yields the highest societal return.
Yet critics caution that the benefits will likely be unevenly distributed. Policy expert Amy Matsui from the National Women’s Law Center said that the programme’s design “has the potential to widen” the wealth gap. Families with higher incomes, she explained, are more able to contribute the full $5,000 each year, amplifying the advantage of the tax incentive. Over time, these differences could be substantial. A family investing consistently could amass nearly $200,000, while one relying solely on the government’s $1,000 seed money and a 6% return would hold only a few thousand.
Economist Teresa Ghilarducci, who has long advocated for similar trust funds, agrees that without reform the plan risks favouring the affluent. She has proposed limiting the tax benefits for families earning above $250,000 annually to ensure the accounts better serve middle- and lower-income households. Despite the criticism, Ghilarducci and Gerstner continue to collaborate, both expressing optimism that adjustments could make the system fairer and more effective.
Practical Challenges and the Promise of Reform
Beyond questions of fairness, the initiative faces practical obstacles. According to Solman’s investigation, participation may be limited by low trust in government institutions and limited financial literacy among lower-income families. Matsui warned that many could fail to claim their accounts or may be reluctant to engage with unfamiliar financial systems, even with $1,000 of government seed money on offer. Gerstner acknowledged this risk, calling it a potential “failure” if the poorest third of families do not participate.
Another concern is how young adults will use their funds once they turn 18. Under the law, they may access up to a quarter of their balance for purposes such as higher education, starting a business, or buying a home. The remaining balance automatically converts to an individual retirement account (IRA), with penalties for early withdrawal. Ghilarducci noted, however, that two-thirds of Americans do not attend university, meaning that penalising withdrawals for non-college uses could unintentionally disadvantage many.
Despite these uncertainties, some see the Trump Accounts as a historic experiment in broadening wealth ownership. Ray Boshara of the Aspen Institute described them as “a down payment on a big idea” that could evolve over time, much like Social Security did after its uneven beginnings.
