Income Tax Vanishes—But Who REALLY Pays?

Sen. Cory Booker is pitching “tax relief” for working families—but his plan erases income taxes for many Americans by shifting the bill onto corporations through higher rates and tougher enforcement.

Quick Take

Sen. Cory Booker introduced the Keep Your Pay Act, aiming to eliminate federal income taxes on the first $75,000 of household income for most families.
The proposal raises the standard deduction to $75,000 for married couples filing jointly, far above the current-law level for 2026.
Booker pairs the deduction with expanded, fully refundable child and earned income tax credits, including a “baby bonus” in a child’s birth year.
The plan claims to be fully paid for by higher corporate taxes, higher taxes on stock buybacks, tighter executive-pay deductions, and stronger corporate tax enforcement.

What Booker’s bill actually changes for paychecks

Sen. Cory Booker’s Keep Your Pay Act centers on a dramatic jump in the standard deduction, designed to wipe out federal income tax on the first $75,000 of household income for most American families. The structure matters: rather than tweaking rates at the margins, the bill tries to remove large amounts of income from taxation upfront. Booker rolled out the plan during his 2026 re-election run in New Jersey.

Under current law for tax year 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers, according to IRS inflation adjustments incorporating amendments from the One, Big, Beautiful Bill. Booker’s proposal would more than double the married-filing-jointly deduction. The scale of that change explains why supporters call it “eliminating income tax” for many households, even though the income tax system still exists.

Credits expand alongside the deduction—especially for families with kids

The Keep Your Pay Act adds major credit expansions on top of the higher deduction. The plan expands the Child Tax Credit to $3,600 per child ages 6–17 and $4,320 for children under 6, with a $2,400 “baby bonus” in the year a child is born. The proposal also makes the credit fully refundable, meaning households can receive it even if their income tax liability is reduced to zero.

Booker also proposes tripling the Earned Income Tax Credit and expanding eligibility to cover workers ages 19–24 and 65 and older who do not have children at home. In plain terms, the bill aims to push more benefits through refundable credits and a larger deduction, moving cash flow toward working-age earners and families. The research provided does not include independent scoring for total cost, take-up rates, or administrative complexity.

The pay-for: higher corporate taxes and tougher enforcement

Booker’s bill claims to pay for the tax relief by raising the corporate tax rate, increasing taxes on stock buybacks, tightening deductions related to executive compensation, and strengthening corporate tax enforcement. Those offsets are the central trade: households see lower federal income taxes, while corporations and certain high-income activities face higher costs. The sources provided do not quantify the rate increase or estimate how much revenue enforcement would realistically generate.

For conservatives focused on limited government and predictable rules, the enforcement piece is where details matter most. “Strengthening enforcement” can mean better compliance—or it can mean broader discretion, more audits, and more paperwork that hits legitimate businesses and investors. The reporting available here does not spell out guardrails, thresholds, or due-process protections. Without those specifics, it’s hard for voters to evaluate whether the plan is a clean tax change or a lever for expanded federal power.

How this fits into Trump-era tax policy and the 2026 political map

The Keep Your Pay Act lands after the One, Big, Beautiful Bill was signed into law on July 4, 2025, which reshaped parts of the tax code and was later reflected in IRS guidance for 2026. That context matters because many families are still adjusting to new deductions and bracket changes. Booker’s proposal is also arriving in a Congress where Republicans hold a narrow Senate majority, making passage difficult without bipartisan support.

Booker’s timing is political as well as policy-driven. He announced the proposal during a 2026 re-election campaign season in New Jersey, with a March 23 filing deadline and a June 2 primary date cited in reporting. The Cook Political Report has rated the seat as safe, suggesting the bill may function more as a national platform statement than as legislation headed for the president’s desk in the current Senate.

One more limitation: the research provided references broader claims about economic benefits in states that eliminated income taxes—higher GDP levels, more startups, and higher wages—but those are state-level scenarios with different tax mixes and replacement mechanisms. Translating that to a federal plan built on refundable credits and corporate tax increases is not straightforward. With limited independent analysis in the provided materials, readers should treat sweeping economic predictions cautiously.