Trump's State of the Union Focuses on "Affordability": Tariffs Replacing Income Tax, Crackdown on Corporate Flipping, Push for 530A Child Accounts

President Donald Trump delivered his first State of the Union address for his second term on February 24, 2026, at the U.S. Capitol in Washington, D.C. The core theme centered around “affordability,” addressing issues from inflation, the housing market, healthcare, to tax reform, all aimed at tackling voters’ biggest concerns about living costs.

Less than a year before the November 2026 midterm elections, Trump sought to bolster support by showcasing his economic record and reform plans, while blaming the Democratic Party for high prices and rising living costs, making the speech heavily campaign-oriented.

Emphasizing declining inflation: Core CPI hits five-year low

During his speech, Trump declared, “Inflation is plummeting.” He pointed out that over the past 12 months, his administration has lowered core inflation to its lowest level in more than five years.

According to recent data, the U.S. Consumer Price Index (CPI) for January increased by 2.4% year-over-year, down from 2.7% in December; the core CPI, excluding food and energy, was 2.5%, the lowest since April 2021. The Federal Reserve’s long-term target is 2% inflation, and Trump used this to highlight that economic policies are beginning to show results.

However, he also blamed the previous high-price environment on the Democratic administration, directly stating, “You caused this problem,” setting the tone for the midterm election campaign.

Tarriffs replacing income tax? Trump proposes bold new idea

On tax reform, Trump again proposed a controversial idea: gradually replacing the modern income tax system with tariff revenue.

He stated, “Over time, I believe tariffs paid by foreign countries will, like in the past, significantly replace the modern income tax system, easing the financial burden on the American people I love.”

At the time of this statement, the U.S. Supreme Court had recently limited its tariff powers significantly. Most economists are skeptical about the feasibility of completely replacing income tax with tariffs, noting that tariffs are ultimately paid by importers, and costs are often passed on to consumers.

Nevertheless, Trump continues to promote tariffs as a key tool for rebuilding the economy and protecting American industries.

Cracking down on corporate housing speculation: calling for limits on large corporate ownership of homes

Housing was another focus of the speech. Trump called on Congress to pass legislation permanently restricting large corporations from holding residential properties.

“We want houses for the people, not for corporations. Corporations are doing very well already,” he emphasized.

This statement had a clear populist tone, directly addressing the phenomenon of large institutional investors buying up homes and driving up prices. Trump hopes that through legislation, the dominance of corporations in the housing market can be reduced, allowing more families to buy homes at reasonable prices.

Healthcare reform: ending ACA subsidies, promoting Health Savings Accounts

On healthcare, Trump continued to focus on “affordability,” proposing to end premium tax credits under the Affordable Care Act (ACA) and replace them with expanded Health Savings Accounts (HSAs).

He said he aims to stop subsidies to large insurance companies and instead “give the money directly to the people,” enabling individuals to purchase “better healthcare at lower costs.”

Earlier this year, Congress debated healthcare reform proposals but failed to reach consensus. Healthcare affordability has long been a Democratic key issue and has also caused divisions within the Republican Party.

Introducing the 530A “Trump Account”: $1,000 per newborn

Trump also heavily promoted the so-called “Trump Accounts,” officially known as 530A accounts, a tax-deferred savings account for children.

Under the plan, children born between 2025 and 2028 will have $1,000 pre-funded by the U.S. Treasury. Trump stated that with moderate additional contributions over time, the account could grow to over $100,000 by age 18.

Currently, about 3 million children have registered. Trump described the program as “growing rapidly” and an important policy tool to strengthen family financial stability.

Focusing on the economic campaign: affordability as a midterm election theme

Overall, the State of the Union centered on “reducing living costs” and “rebuilding economic fairness,” covering inflation data, housing reforms, tax policies, and healthcare, all framing Trump’s economic narrative.

As the 2026 midterm elections approach, “affordability” has become a key battleground for both parties vying for control of Congress. Trump aims to persuade voters through slowing inflation and structural reform plans, but policies like replacing income tax with tariffs and adjusting healthcare subsidies will face tough scrutiny from Congress and markets.

This article, “Trump’s State of the Union Focuses on ‘Affordability’: Replacing Income Tax with Tariffs, Cracking Down on Corporate Housing, Launching 530A Child Accounts,” first appeared on Lian News ABMedia.