Cory Booker’s ‘Keep Your Pay Act’ would wipe out taxes on first $75,000 and expand child tax credits
Cory Booker on Monday announced a sweeping proposal to eliminate federal income taxes on the first $75,000 of income for most households, arguing the plan would significantly boost take-home pay for working- and middle-class Americans. The New Jersey Democrat said the idea would reshape the tax code by dramatically increasing the standard deduction while expanding several tax credits aimed at families and low-income workers.
Booker plans to introduce the legislation, called the “Keep Your Pay Act,” in the Senate this week. The proposal comes as he faces a 2026 re-election campaign and is widely viewed as a potential candidate in the 2028 presidential race.
Booker says tax-free first $75,000 would be a “game changer”
Booker framed the proposal as a major shift designed to help households struggling with rising costs.
“It’s a simple idea: American households shouldn’t pay taxes on their first $75,000 of income,” Booker said. “That would meaningfully raise the take-home pay of the average American family.”
In a separate statement, he emphasized the broader economic impact of the proposal.
“New Jerseyans are working harder than ever but still struggling with rising costs and an economy that feels stacked against them,” Booker said. “Making the first $75,000 of income tax-free would be a game changer for working families.”
Proposal would more than double the standard deduction
The core of the plan involves a major expansion of the standard deduction, which would allow households to shield a larger portion of income from federal taxation.
Under the proposal, married couples filing jointly would receive a $75,000 standard deduction. Individual filers would receive a $37,500 deduction, while heads of household would receive $56,250.
Currently, the standard deduction stands at $32,200 for married couples filing jointly and $16,100 for single filers.
Median families could see taxes fall by about 85%
According to estimates from Booker’s office, the plan would dramatically reduce federal income tax burdens for many households.
Officials say the median American family could see its federal income tax bill drop by roughly 85%. The increase in the standard deduction would also encourage more taxpayers to stop itemizing and instead rely on the simpler deduction when filing their returns.
Supporters argue this could simplify how millions of Americans interact with the tax code.
Bill expands child tax credit and adds baby bonus
Beyond the deduction increase, the legislation would expand several family-focused tax credits.
The plan calls for raising the Child Tax Credit to $3,600 per child ages 6 to 17 and $4,320 for children under age 6. It would also create a one-time $2,400 “baby bonus” for families in the year a child is born.
The credit would be fully refundable, allowing families with little or no tax liability to still receive the benefit.
Earned Income Tax Credit would expand to more workers
The proposal would also significantly broaden the Earned Income Tax Credit (EITC), a benefit designed to boost incomes for lower-wage workers.
Booker’s plan would extend eligibility to workers between ages 19 and 24 and to those over age 65 who currently do not qualify for the full benefit. The legislation would also triple the credit’s value for workers without children living at home.
Booker has previously supported similar expansions, including temporary measures enacted under the 2021 American Rescue Plan that studies found reduced child poverty.
Booker says plan would be funded by taxing corporations and the wealthy
To offset the cost of the tax cuts, the proposal includes several measures aimed at increasing taxes on corporations and high-income individuals.
These include raising the corporate tax rate, increasing taxes on stock buybacks, tightening rules on executive compensation deductions and strengthening corporate tax enforcement.
“This plan can be fully paid for by unrigging our tax system – so that the wealthiest few and the biggest corporations that are getting rich by keeping prices high finally start paying their fair share,” Booker said.
Senator argues plan would boost household finances immediately
Booker said the tax changes would quickly put more money in workers’ paychecks, helping families cope with rising living costs.
“This tax cut would immediately put more money in your pocket every month to deal with the high price of everyday expenses, an unexpected emergency, or to plan for the future,” he said.
Booker pushes “big ideas” as Democrats look toward 2028
Booker has increasingly positioned himself as one of the Democratic Party’s most visible communicators during the early years of President Donald Trump’s second administration.
Speaking about the political moment, Booker argued that Democrats need to present bold economic proposals rather than simply opposing Republican policies.
“I have not closed the door on ’28, but I’m really focused on now that the Democratic Party needs to not be defined by what it’s against, simply, but start talking about the big things it stands for,” he said.
In recent months, Booker has drawn national headlines with a series of attention-grabbing political actions.
Last year he delivered a record-setting speech on the Senate floor lasting more than 25 hours. Weeks later, he staged a 12-hour livestreamed sit-in outside the U.S. Capitol to protest Republican plans to cut Medicaid.
The senator currently chairs Senate Democrats’ strategic communications committee and has emerged as a leading voice in the party’s messaging efforts.
Proposal comes amid Booker’s 2026 re-election campaign
The tax proposal arrives as Booker seeks another term representing New Jersey in the Senate.
Despite the election-year timing, the race is widely viewed as safe for the incumbent. The Cook Political Report currently rates the seat as a solid Democratic hold.
Republicans hold a narrow Senate majority heading into the 2026 midterms, controlling 53 seats compared with 45 Democrats and two independents who caucus with them.
The senator’s office also launched an online calculator allowing Americans to estimate how much they could save under the proposal.
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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