Senator Cory Booker (D-NJ) unveiled a sweeping tax plan this week aimed at putting more money directly into the pockets of working Americans.
The Keep Your Pay Act would eliminate federal income tax on the first $75,000 of earnings for households filing jointly.
For New Jersey residents already burdened by a high cost of living—including the nation’s highest property taxes—the proposal aims to tackle economic pressure that shows no signs of easing.
According to Booker’s office, the median American family would see their federal taxes cut by roughly 85 percent under the plan.
How the Plan Works
The Keep Your Pay Act is straightforward. At least on paper. The first $75,000 earned by married couples filing jointly would be completely exempt from federal income tax. Single filers would see the threshold set at $37,500, while heads of households would get $56,250.
Currently, the standard deduction sits at $32,200 for joint-filing couples and $16,100 for single filers.
Beyond the standard deduction increase, Booker’s plan expands the Child Tax Credit to $3,600 per child aged 6 to 17, and $4,320 for children under six. Families would receive an additional $2,400 “baby bonus” the year a child is born.
The Earned Income Tax Credit would also expand, extending eligibility to groups currently excluded from full benefits, including workers aged 19-24 and those aged 65 and above.
To better outline what deductions might look like, Booker’s office has set up a Keep Your Pay Act Calculator. You simply plug in your income, filing status, number of kids, and their ages—the calculator then shows what you would save under the act.
The Political Calculation
Booker framed the proposal as an outline for the next time Democrats control the tax code. The New Jersey senator, who ran for president in 2020 and hasn’t ruled out another bid in 2028, told NBC News he’s focused on re-election this fall. However, the sweeping nature of the proposal signals he might have his eyes set on higher office.
“Americans are working harder and harder, and they’re making less and less relative to their parents and grandparents,” Booker told NBC. “The economy is not working. So we need big ideas that could redeem the dream of America.”
How It Gets Paid For
Booker says the plan would be fully funded by closing tax loopholes for the ultra-wealthy and corporations. That means raising the corporate tax rate, strengthening corporate tax rules, increasing taxes on stock buybacks, and tightening executive compensation deductions.
For New Jersey—a state where median home values exceed $400,000 and property tax bills routinely surpass $8,000 annually—federal tax relief carries real weight. Whether Booker’s proposal goes anywhere in a divided Congress remains uncertain, but the plan could have an impact on the 2026 Midterms if it gains enough traction with the public.
One thing is for certain: it’s a populist message. And for working families, the idea of tax-free income on the first $75,000 represents the kind of structural relief that appeals across party lines.
Cory Booker is expected to formally introduce the act to Congress this week.