U.S. Senator Cory Booker (D-NJ) speaks during a press conference to discuss how the ongoing government shutdown is affecting healthcare, on Capitol Hill in Washington, D.C., U.S., October 29, 2025. REUTERS/Kylie Cooper
(Trenton, New Jersey) – Sen. Cory Booker has unveiled a new tax-cut proposal called the “Keep Your Pay Act,” which would eliminate federal income tax on the first $75,000 of income for most households.
The New Jersey Democrat announced the proposal Monday as he prepares for a 2026 re-election campaign, pitching the plan as a way to give working families significant financial relief amid rising costs.
Under the legislation, the standard deduction would increase to $75,000 for married couples filing jointly, with proportional deductions for single filers and heads of household. Booker’s office estimates the change could reduce the median family’s federal income tax burden by about 85%.
“New Jerseyans are working harder than ever, but they’re struggling to get by because they’re facing out-of-control costs and an economy that is stacked against them,” Booker said in a statement announcing the bill. “No income tax on the first $75,000 families earn would be a game changer for working people.”
The plan also includes several expanded tax credits aimed at helping families. Booker’s proposal would increase the Child Tax Credit to $3,600 for children ages 6 to 17 and $4,320 for children under 6, along with a $2,400 “baby bonus” in the year of a child’s birth. The credits would be fully refundable.
In addition, the legislation would expand the Earned Income Tax Credit, tripling its value and extending eligibility to workers ages 19 to 24 and those 65 and older who do not have children at home.
To pay for the plan, Booker says the bill would increase taxes on corporations and high-income earners. Proposed offsets include raising the corporate tax rate, increasing taxes on stock buybacks, tightening deductions for executive compensation, and strengthening corporate tax enforcement.
“This plan can be fully paid for by unrigging our tax system so the wealthiest few and the biggest corporations finally start paying their fair share,” Booker said.
Booker also launched an online calculator allowing Americans to estimate how much they could save under the proposal.
The legislation arrives as the 2026 Senate midterm elections approach. Democrats are seeking to regain control of the Senate, while Republicans currently hold a 53–45 majority, with two independents caucusing with Democrats.
Despite the competitive national map, political analysts widely view Booker’s seat in New Jersey as safe for Democrats heading into the election cycle.
If passed, the Keep Your Pay Act would represent one of the most significant changes to the federal tax system in decades, though the proposal is expected to face intense debate in Congress.
