On July 4, the federal government launched what it described as one of the nation’s most ambitious asset-building initiatives for children in decades. Under this new tax-based savings program, every child born in the United States between January 1, 2026, and December 31, 2028, receives a $1,000 investment account branded as Trump Accounts.
The premise is straightforward: give every child an investment account, let compound returns do their work, and build wealth over time.
But whether these accounts ultimately narrow America’s wealth gap depends less on the initial $1,000 deposit than on the financial architecture that follows.
New research from the Institute on Race, Power and Political Economy at The New School suggests that Trump Accounts are unlikely to reduce America’s wealth gap. Based on what we already know about how tax-preferred savings vehicles operate, they may actually widen it.
That may sound counterintuitive. How can a program that gives every child the same $1,000 seed increase inequality? The answer is that the government deposit is only the starting point. What matters most is everything that comes after.
