By Jeanne Whalen and Rebecca Picciotto

In a record-length State of the Union address, President Trump threw out a string of eye-catching economic ideas. Among them: new retirement accounts for Americans without access to 401(k)s; replacing income taxes with tariff revenue; balancing the federal budget by eliminating fraud; and lowering the cost of housing for buyers while preserving high home values for happy homeowners.

His proposals and promises come as American voters are increasingly frustrated with the economy. About 56% of Americans disapprove of his handling of it, compared with about 40% who approve, according to an average of polls collected by the nonpartisan Cook Political Report.

Here's a look at the math behind some of Trump's economic notions:

Relief for home buyers, wealth for homeowners

Trump is up against a fundamental dilemma in housing policy: how to lower home prices while also preserving equity for Americans whose homes are a large part of their wealth. "We're going to do both," he said Tuesday.

The median home price in the U.S. is about $405,000, compared with $327,000 in 2019. For most households, that means pulling down a six-figure income to break into the market. But bringing down prices is a tough sell to people who already own. Home equity represents a median 45% of American homeowners' overall net worth, a Pew Research Center analysis found.

Trump might be able to have it both ways. If mortgage rates continue to fall, more buyers will be able to afford homes, while generating enough demand so that sellers don't have to lower prices. The average rate on a standard 30-year fixed mortgage is 6.01%, compared with 6.85% last February, according to Freddie Mac.

A Zillow analysis found that already, the median-income household can afford a home that is $30,000 more expensive than a year ago, because of the mortgage-rate declines and income growth of the past year. That puts home-buying power at its highest level in almost four years.

Still, the U.S. is short about four million homes, by some estimates. Trump has expressed an aversion to building too many homes for fear of bringing down property values. Economists don't share that concern. More supply, they say, would slow the rate of home-price appreciation. But it would be nearly impossible to build quickly enough for home values to plummet.

"This can be a win-win scenario," said David Dworkin, chief executive at the National Housing Conference. "It's not a zero-sum game."

The president has also been focused on banning institutional investors from buying single-family homes, complaining that big investors make it harder for American families to purchase homes.

These investors own a tiny portion of the overall housing stock: less than 3%. But that still translates to hundreds of thousands of homes, concentrated in cities such as Atlanta and Charlotte, N.C. Forbidding these investors from renting out homes might expand the supply of for-sale properties by a 1-2%, economist Joseph Gyourko estimated in a recent Brookings analysis. And it would simultaneously push rents up by shrinking the pool of rental options.

Replace income tax with tariffs

Fresh off the sting of the Supreme Court decision invalidating his emergency tariffs, Trump reiterated his belief in tariffs as a powerful economic tool, saying that tariffs could eventually "substantially replace" federal income tax.

"This is not within the realm of possibility," said Kimberly Clausing, a tax-policy professor at University of California, Los Angeles, and a former Treasury official in the Biden administration.

Tariffs were one of the primary sources of federal-government revenue before the introduction of income taxes in 1913. Today, individual income taxes make up about half of federal revenue, dwarfing tariff payments.

The U.S. collects more than $2.5 trillion a year in individual income taxes, while total tariff collections this fiscal year, before the Supreme Court decision, were on track to reach about $420 billion, according to the Congressional Budget Office.

U.S. Treasury Secretary Scott Bessent has said that he expects his department to take in about the same amount of tariff revenue in 2026 as before, with the help of new tariffs Trump has imposed since the Supreme Court ruling, though other estimates say revenues might drop depending on how long the new tariffs are in place.

Balancing the budget by eliminating fraud

Trump also suggested the U.S. could balance the federal budget by eliminating fraud, and tapped Vice President JD Vance to lead the effort. If "we're able to find enough of that fraud, we will actually have a balanced budget overnight. It'll go very quickly. That's the kind of money you're talking about," Trump said.

The federal government loses an estimated $230 billion to $520 billion annually to fraud, according to the Government Accountability Office.

Meanwhile, the federal deficit -- the gap between the nation's revenue and spending -- is roughly $1.8 trillion a year. "The bottom line is the numbers don't come close to adding up," said Kent Smetters, an economics and public policy professor at the University of Pennsylvania's Wharton School.

Fighting fraud effectively also costs money, he added. "If you could just flip the switch, of course just flip the switch. The problem is it costs you money to combat that," Smetters said.

Write to Jeanne Whalen at Jeanne.Whalen@wsj.com and Rebecca Picciotto at Rebecca.Picciotto@wsj.com

(END) Dow Jones Newswires

February 25, 2026 19:10 ET (00:10 GMT)

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