Don’t Kill Trump Accounts. Fix Them.

When the Republican platform introduced “Trump Accounts” last year, the framing was effectively a modern marketing pitch for the American Dream: provide households with a tax-advantaged vehicle for their children and let the quiet power of compounding interest handle the rest.

The appeal is intuitive: by initiating investments early and maintaining them over time, you build a durable financial foundation. It is a theory we find compelling. ImpactCT is committed to policies that drive upward mobility for Connecticut residents—particularly for communities historically sidelined from wealth creation. We want to support efforts that expand capital access and work toward narrowing the persistent wealth gap.

However, as is often the case in policy, the devil is in the details. The structure of Trump Accounts reveals a more complicated reality: they not only reflect the inequities of the current economy, they actually exacerbate them. They reward those who already have more. As this TIME analysis observes, growth relies on private contributions and market fluctuations. Families with disposable income can maximize these benefits, while many lower-income households (including a significant portion of the Republican base) simply cannot.

Consider a household capable of investing $5,000 annually. Those savings could mature into a $300,000 asset by the time a child reaches adulthood, thanks to compounding interest and expected annual returns. A family that cannot invest additional funds beyond the $1,000 will likely end up with an asset that is worth just $5,839 by the child’s eighteenth birthday, according to a model by the Council of Economic Advisers. In addition, the family that contributes the maximum amount every year will also realize a tax savings, while the family that cannot contribute additional funds will receive no tax benefit. While $5,839 is certainly better than zero dollars, the disparity between those two figures is stark, to say the least.

In short, instead of closing inequalities,Trump Accounts compound them over time.

Still, the core idea that asset-based growth is a vital ladder is relevant. For many families, even a modest savings account is a foot in the door. This week, Connecticut wrapped up a legislative cycle where affordability was a dominant media topic. Lawmakers passed a $29 billion budget with substantial allocations for childcare, municipal aid, and gun safety regulations. But, bolder ideas like a renter’s tax credit stalled. There’s no major rebate coming, no broad-based tax cut that meaningfully shifts people’s monthly budgets. For a lot of families, there isn’t disposable income to invest - there’s barely enough to cover basic costs.

Contrast the Trump Accounts with Connecticut’s baby bonds program. The latter uses public seeding to build assets for lower-income families rather than relying on personal wealth. Coupled with new requirements for financial literacy in our schools, the state is acknowledging that access to capital only matters if citizens have the agency and resources to manage it. This is an attempt to solve for the same objective as the Trump Accounts, but with an eye toward equity rather than exclusion.

Despite being an awful policy, Connecticut families should still take advantage of Trump Accounts. If our reaction to a flawed federal program is total withdrawal based on its imperfections, those with the least cushion pay the heaviest price. If the goal is to dismantle inequity, the response cannot be disengagement; otherwise, we aren’t fixing the imbalance, we are merely ensuring the status quo remains untouched.

Wealthy families will find other ways to build equity; those without resources are simply left behind.