Proposed Tax Plan Could Let Many Americans Keep Their First $75,000 Tax-Free

A new proposal from Cory Booker could significantly reduce federal taxes for many Americans.

The plan, known as the Keep Your Pay Act, would remove federal income taxes on the first $75,000 of earnings for many households and expand tax credits for working families.

The proposal aims to provide financial relief to low- and middle-income Americans dealing with rising living costs.
 

How the Proposal Would Work

Under the plan, the standard deduction would increase to:

• $75,000 for married couples filing jointly

• $37,500 for single filers

• $56,250 for heads of household

If enacted, this would mean many households would not pay federal income taxes on the first portion of their income.

Read: Trump Accounts 2026: Who Qualifies for the $1,000 and How It Works
 

Expanded Tax Credits for Families

The bill would also increase key tax benefits that help working families:

• Child Tax Credit:

  • $4,320 for children under age 6

  • $3,600 for children ages 6–17

• Baby bonus:

  • A new $2,400 payment for families in the year a child is born

• Earned Income Tax Credit expansion:

  • The credit would be tripled

  • Eligibility would expand to workers ages 19–24 and 65+ without children at home
     

How the Plan Would Be Funded

Supporters say the plan would be paid for by:

• Increasing taxes on large corporations

• Raising taxes on high-income earners

• Strengthening enforcement to prevent corporate tax avoidance

What Happens Next

The proposal is expected to be introduced in the United States Senate, but it has not yet been approved by Congress.

Lawmakers would still need to debate the measure and determine its total cost.

If passed, the plan could represent one of the biggest changes to the federal tax system in years, potentially allowing many Americans to keep more of their income while also expanding tax credits for families.

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