The ‘Keep Your Pay Act’ would raise the standard deduction to $75,000 for married couples filing jointly, with proportional amounts for single filers and heads of household.
The measure would cut federal income tax on the median American family by an estimated 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 — so we need big ideas to start making the American Dream possible for everyone again,” Booker wrote in a statement unveiling his bill. “No income tax on the first $75,000 families earn would be a game changer for working people.”
“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 added.
The bill would offset costs by raising the corporate tax rate, increasing taxes on stock buybacks, tightening executive compensation deductions, and strengthening corporate tax enforcement to generate more revenue from corporations and wealthy individuals.
“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’s statement added. “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.”
The proposal also would expand the Child Tax Credit to $3,600 per child ages 6 to 17 and $4,320 for children under 6, with a fully refundable $2,400 “baby bonus” in the year of a child’s birth. It would triple the Earned Income Tax Credit and broaden eligibility to workers ages 19 to 24 and 65 and older without children at home.
Booker launched an online calculator for individuals to estimate potential tax savings under the plan.