NJ Senator's Bill Would End Federal Income Tax For Households Earning $75,000

U.S. Sen. Cory Booker is pitching a plan to eliminate federal income tax for households earning up to $75,000 per year, which he says would be paid for by raising taxes on the “ultra-wealthy” and big corporations.

On Monday, Booker – a Democrat from New Jersey who is running for re-election in 2026 – introduced the Keep Your Pay Act.

According to the senator, here’s how the legislation would work if it crosses the finish line:

Increase the standard deduction to $75,000 – The plan makes the first $75,000 of income tax free for those who are married filing jointly, and includes proportional tax relief for heads-of-households and single-filers, more than double the standard deduction for every American.

Expand the Child Tax Credit under the American Family Act – The credit would increase to $3,600 per child aged 6 to 17 and $4,320 for children under six, with an additional $2,400 “baby bonus” in the year a child is born to help families meet the high upfront costs of welcoming a new child. The credit would be made refundable, ensuring that no families are left behind for having too little income.

Expand the Earned Income Tax Credit through the Tax Cut for Workers Act – The plan would deliver tax relief to workers without children in the home by expanding eligibility to younger workers aged 19 to 24 and older workers aged 65 and above (groups that are currently excluded from the full benefit), while also tripling the value of the credit.

Booker said the proposal would be fully paid for by closing “unfair tax loopholes used by the ultra-wealthy and big corporations and requiring them to pay their fair share.”

This will include raising the corporate tax rate, strengthening the corporate tax rules, increasing taxes on stock buybacks, tightening limits on executive compensation deductions, and taking other measures to “return fairness to our tax system,” the senator said.

Booker, a Newark resident, announced his proposal during a roundtable discussion on Monday in Bloomfield. He has launched an online calculator that he says shows what a household will pay under his plan.

“The tax system – we all know this – is rigged,” he charged. “So let’s unrig it.”

• See Related: Here's What NJ Voters Think Of The 'Big, Beautiful Bill,' Poll Says

NEW JERSEY BUDGET WOES

Booker’s federal tax proposal comes as New Jersey is confronting a financial crunch on the state level.

Gov. Mikie Sherrill recently warned that New Jersey is facing a “serious structural deficit” that will force some tough choices during a news conference in Trenton.

“Let’s face it, for decades, previous administrations have allowed for business as usual in Trenton and failed to solve things long term,” Sherrill said, adding that there have been too many “one-offs and temporary fixes” over the years.

“So now we're staring down an estimated $3 billion structural deficit,” she said. “If we do nothing, our entire $7.2 billion surplus will be gone by the budget year that begins July 1, 2027, and we’ll be another $750 million in the hole on top of that.”

Sherill insisted that her administration is not planning to raise taxes on New Jerseyans, instead looking for “savings” to fix the state’s “historic spending problem.” Her administration recently released a policy blueprint that cites a plan to “boost revenues without new taxes.”

Sherrill, a former U.S. House of Representatives member, is scheduled to make her first state budget address on Tuesday.

• Related: NJ Faces Severe Budget Crunch; Some Want 'Billionaire Tax' – Others Demand Cuts
• Related: ANCHOR Tax Rebate's Future Uncertain As Sherrill Looks To Close Budget Gap
• Related: Here’s How Much Income It Takes To Be Rich In New Jersey

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site.