According to President Trump, the state of America’s union is STRONG, the Golden Age is upon us, and “we’re winning so much that we really don’t know what to do about it.”
All true…for multimillionaires like us. For the 86% of Americans who are worried about the price of groceries? Not so much.
On Tuesday night, Trump delivered his first presidential State of the Union address for his second term. His 1 hour and 48 minute speech was the longest in recent history and, in between his coerced standing ovations, he touched on a range of subjects, including the economy, foreign affairs, immigration, healthcare, crime, the Olympics, and more. For this week’s Closer Look, we’d like to focus on what Trump had to say about the economy. Specifically, we want to share the real state of the union’s economy—and not just for rich people, but for the millions of working people across America.
We’ll start by setting the record straight on some blatant falsehoods that Trump made in his address about taxes and tariffs. Then we’ll explore the truth about the affordability crisis and who’s actually to blame for it. Finally, we’ll close by discussing ways to gauge the real state of the economy. Spoiler alert: it’s not the stock market!
Fact check on taxes and tariffs
Trump wasted no time boasting about the passage of the One Big Beautiful Bill, his and Republicans’ signature megabill that extended a number of tax provisions from the 2017 Tax Cuts and Jobs Act and added new ones. He chose to highlight the few provisions of the bill that benefited workers, like its tax breaks on tips, overtime, seniors, and auto loan interest—which all together only comprise roughly a tenth of the bill’s net tax cuts in 2026.
The rest of the bill was only “big” and “beautiful” for wealthy people like us and corporations. Everything from the extension of lower federal income tax rates and brackets; the extension of the deduction for pass-through businesses; the extension and expansion of the increased thresholds for the estate tax; the reinstation of a number of business tax breaks; and even the extension of a rum tax rebate for Puerto Rico and the U.S. Virgin Islands all work to benefit those at the top.
When it came to discussing his tariff policy, Trump continued to falsely claim that foreign countries pay the cost of tariffs when the evidence shows it’s average Americans that do. Corporations have openly admitted that they passed the cost of the tariffs onto their customers to protect their profit margins. They represent the biggest tax increase that Americans have experienced since 1982, costing the average American family $1,745 between February 2025 and January 2026. And while it may appear promising that the Supreme Court struck down most of his global tariffs last week, Trump vowed in his address to use other legal avenues to keep them on the books.
The Institute on Taxation and Economic Policy recently ran the numbers on Trump’s tax cuts and tariffs and found that all but the richest 5% of Americans are paying higher taxes in 2026 because of them. The bottom 20% of earners are paying an average $480 more in taxes (or 3.1% of their income) while the top 1% are paying an average $8,850 less. Corporations are doing just fine too. Companies like Live Nation and Palantir have already announced that they paid $0 in federal income taxes in 2025 thanks to Trump.
Fact check on the affordability crisis
You’d never guess that it was just three months ago that Trump declared himself “THE AFFORDABILITY PRESIDENT” on social media given how much he hates the buzzword now. In his address, he took a swipe at Democrats for cooking up the word “knowing full well that they caused and created the increased prices that all of our citizens had to endure,” and then pushed price drops for things like eggs, fruit, hotels, and rent to give the impression that his administration cleaned up the mess.
Despite what Trump may say, the affordability crisis is not a “con job” and is a very real thing being experienced by millions of very real Americans. Inflation has fallen from its sky-high peak in 2022. But while prices may not be climbing anymore, they’re also unfortunately not falling, as costs for essentials like housing, healthcare, and groceries are still exorbitantly high. And just as importantly, people’s paychecks have not risen fast enough to meet the moment. In his address, Trump said “Incomes are rising fast;” he got the “rising” part right, but certainly not the “fast” bit. It’s also not a coincidence that he mentioned “wages” exactly zero times on Tuesday night.
The Urban Institute’s American Affordability Tracker helps to put this in perspective. According to the tracker, average earnings in the US have grown 38% since 2017. That would be a welcome development, were it not for the fact that, over the same period, the cost of childcare rose by 40%, rent by 50%, health insurance by 41%, and home sale prices by 80%. Rates of delinquency on student loans, mortgages, credit cards, and auto and retail loans are also unsurprisingly on the rise. In the end, the Urban Institute calculates that 52% of Americans don’t have the financial resources needed to fully participate in society.
Trump may slap a big “W” (for “winning”) on the economy under his administration, but most people these days are actually putting a “K” on it. The “K-shaped economy,” as it’s being called, works like this: high-income households on the upper part of the “K” are seeing their incomes and wealth rise and are spending like crazy on luxury goods and services, while low-income households on the bottom part of the “K” are reducing their spending amidst higher prices and weak wage gains. Low-income workers experienced the biggest gains of all income groups after the pandemic, but no longer: in 2025, the bottom 25% of earners saw their wages increase 1.5% while the top 25% experienced a 2.4% bump.
Our economy can’t be buoyed by rich people’s spending forever. If low earners continue to pull back on their spending and don’t see any meaningful increases in their wages—and if unemployment continues to rise—the bottom part of the “K” will be erased entirely and take the economy down with it.
Who’s to blame for all this, you may ask? Trump says it’s Democrats, but we know the real culprit: billionaires.
We spoke a few months ago about all the ways that private equity companies suck the lifeblood out of the economy, and many of the executives at the helm of these firms are billionaires. We have evidence today that the tactics of billionaire-run private equity firms have increased the cost of everything from housing to health care to child care to groceries…and even to youth sports!
So long as Trump does nothing to rein in the billionaire class, he can’t say he’s done anything meaningful to solve the affordability crisis. Perhaps his constant griping about the word “affordability” is a cover for that.
Conclusion
In his State of the Union address, Trump equated the “country’s stunning economic turnaround” with the Dow Jones breaking 50,000 and the S&P hitting 7,000. His attorney general, Pam Bondi, even believes that’s worth more attention than the Jeffrey Epstein files.
How the stock market is doing might be a good gauge for how the economy is faring for rich people like us, but not for working people. Trump and Bondi conveniently fail to recognize that the wealthiest 10% of Americans own roughly 87% of all stocks, while the poorest 50% own just 1.1%.
We’d like to suggest some other ways to judge the real health of the economy for the vast majority of the country. How about the number of Americans that can pay for their rent without using a credit card? How about the number of Americans that can put their kid to bed at night without having to follow it by getting dressed to go to their second or third job? How about the number of Americans that don’t have to decide whether to skimp on prescription drugs or groceries to break even? How about the number of Americans that make a wage at their jobs that is in line—or even marginally in line—with how much it costs to live in their area? How about the number of CEOs that don’t make 281 times more than their employees?
Judging by those kinds of metrics, we’re not doing so hot, and Trump really doesn’t have any business talking about “economic turnaround[s]” before a joint session of Congress. Especially as his tax cuts for the wealthy and corporations and back-breaking tariffs are making life all the more unaffordable for millions of Americans.
We have the ability to make the state of the union strong. We have the ability to enter a golden age in America and “[win] so much that we really don’t know what to do about it.” But only if we accept what a healthy economy actually looks like, and reject the trickle-down, billionaire-centered policies that Trump and his allies have enacted that keep us from achieving it.