Trump's State of the Union: Tax Cuts, New Investment Accounts, and the Tariff Drama

President Trump used Tuesday night's State of the Union address to tout his tax wins, push new retirement accounts for Americans, and defend his tariff policies just days after the Supreme Court struck them down.

The speech clocked in at 1 hour and 47 minutes, the longest State of the Union on record. Trump spent a good chunk of it celebrating the One Big Beautiful Bill Act (OBBBA) passed last year.

Tax Cuts Are Here (And Republicans Got Full Credit)

"Last year, I urged this Congress to begin the mission by passing the largest tax cuts in American history, and our Republican majorities delivered so beautifully," Trump said. He made sure to note every Democrat voted against it.

The bill eliminated taxes on tips, overtime, and Social Security benefits for seniors. It also made auto loan interest tax-deductible, but only if the car is made in America.

Trump highlighted a Pennsylvania couple whose tax bill will be cut in half thanks to the new breaks on tips, overtime, and the expanded child tax credit. Real families saving real money is the talking point of choice.

Trump Accounts Get a $6.25 Billion Boost

The Trump Accounts, which are tax-free investment accounts for kids born between 2025 and 2028, got a massive shoutout. Each account starts with $1,000 from the feds. Then Michael and Susan Dell dropped $6.25 billion to fund Trump Accounts for 25 million American kids.

"With modest additional contributions, these young people's accounts could grow to over $100,000 or more by the time they turn 18," Trump said.

He credited Brad Gerstner, CEO of Altimeter Capital, for pushing the Trump Accounts into OBBBA. The goal is simple: give kids a financial head start before they even understand compound interest. Parents can sign up at trumpaccounts.gov.

New Retirement Accounts Coming in 2026

Trump announced a new retirement account program similar to a 401(k), but with a government match of up to $1,000 per year. The target audience is the half of working Americans who don't have access to an employer-sponsored retirement plan.

"We will match your contribution with up to $1,000 each year, as we ensure that all Americans can profit from a rising stock market," Trump said.

Since Trump took office, the average 401(k) balance is up $30,000, according to his speech. The stock market has been on a tear, with the Dow breaking 50,000 and the S&P hitting 7,000.

The Tariff Fight Isn't Over

Trump credited his tariff policies for driving economic growth, even after the Supreme Court ruled them unconstitutional last week. He called the ruling "unfortunate" but claimed most countries and corporations want to stick with the deals they already made.

"The good news is that almost all countries and corporations want to keep the deal that they already made, knowing that the legal power that I as president have to make a new deal could be far worse for them," Trump said.

Translation: the tariffs may be dead legally, but the threat of new ones is keeping everyone in line. He made it clear this isn't over.

Democrats Fire Back

Many Democrats skipped the speech or attended an alternative "People's State of the Union" event. Virginia Governor Abigail Spanberger delivered the official Democratic response from Colonial Williamsburg.

"Since this President took office last year, his reckless trade policies have forced American families to pay more than $1,700 each in tariff costs," Spanberger said. She blamed Trump for hurting small businesses and farmers, adding that the Supreme Court ruling doesn't undo the damage already done.

What This Means for CPAs

Tax professionals should expect clients asking about the new deductions, especially the auto loan interest deduction and the Trump Accounts. The retirement matching program launching next year will also create planning opportunities.

As for tariffs, even though they're technically unconstitutional, expect ongoing uncertainty in international tax planning. The threat of new tariffs keeps businesses and foreign governments guessing.

Bottom line: Trump's tax agenda is moving fast, and CPAs need to stay sharp to help clients take full advantage.