Sen. Cory Booker’s “Keep Your Pay Act” would expand tax credits and significantly reduce income taxes for many households.
By yourNEWS Media Newsroom
Sen. Cory Booker, D-N.J., announced a new tax proposal that would eliminate federal income taxes on the first $75,000 earned by most households while expanding several tax credits aimed at working families.
According to a Fox News report, Booker’s proposed legislation—called the Keep Your Pay Act—would increase the standard deduction to $75,000 for married couples filing jointly, with proportional adjustments for single filers and heads of household. The plan is projected to reduce federal income tax for the median American family by an estimated 85 percent.
Booker introduced the proposal as he prepares for a 2026 re-election campaign.
“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 — so we need big ideas to start making the American Dream possible for everyone again,” Booker said in a statement announcing the legislation. “No income tax on the first $75,000 families earn would be a game changer for working people.”
He added that the proposal would provide immediate financial relief to households dealing with rising living expenses.
“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,” Booker said.
The senator, who has been mentioned as a potential presidential candidate in 2028, said the measure would be financed by changes that increase tax revenue from corporations and high-income earners. The proposal includes raising the corporate tax rate, increasing taxes on stock buybacks, tightening deductions for executive compensation and strengthening corporate tax enforcement, according to information describing the proposal.
Booker said the funding mechanism would allow the tax reductions to be fully offset.
“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. “This idea will ensure Americans who work for a living keep more of their paychecks, help restore tax fairness, and start making America a country where working people can get ahead again.”
In addition to eliminating income taxes on the first $75,000 of earnings, the legislation proposes expanding several federal tax credits.
The bill would increase the Child Tax Credit to $3,600 per child ages 6 through 17 and $4,320 for children under age 6. It would also provide a $2,400 payment in the year of a child’s birth, described in the proposal as a “baby bonus.” The credit would be fully refundable.
The legislation also calls for expanding the Earned Income Tax Credit by tripling its value and extending eligibility to workers ages 19 to 24 as well as those 65 and older who do not have children living at home.
Booker also introduced an online calculator allowing individuals to estimate potential savings under the proposal through a tax calculator posted on his Senate website.
The senator has previously supported expanding the Child Tax Credit and the Earned Income Tax Credit. Temporary expansions included in the 2021 American Rescue Plan were later studied and found to have significantly reduced child poverty during the period the provisions were in effect.
Booker’s proposal comes during an election cycle in which he is seeking another term representing New Jersey in the Senate. Political analysts currently rate the seat as safely Democratic. Republicans hold a narrow Senate majority heading into the 2026 midterm elections with 53 seats, compared with 45 Democrats and two independents who caucus with them.
Democrats are focusing their efforts on competitive Senate races in Alaska, Georgia, Maine, Michigan and Ohio. Republicans could also attempt to challenge a Democratic-leaning seat in New Hampshire, where former Sen. John E. Sununu has announced a campaign.
In New Jersey, the deadline to file for the Senate primary election is March 23. The primary will take place June 2.
Potential Republican contenders include former New Jersey State Trooper Richard Tabor and former reporter Alex Zdan, who have both been mentioned as possible candidates for the seat.
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