Keep Your Pay Act

The Keep Your Pay Act aims to provide substantial tax relief to working- and middle-class Americans by more than doubling the federal standard deduction. Under the proposal, the standard deduction would increase to $75,000 for married couples filing jointly and $37,500 for single filers. This change would effectively eliminate federal income tax on the first $75,000 of earnings for most households, which the sponsor suggests could reduce the tax burden for a median American family by approximately 85 percent.

In addition to the increased deduction, the bill proposes expanding several key tax credits. It would increase the Child Tax Credit to $4,320 for children under age six and $3,600 for older children, while also introducing a $2,400 "baby bonus" for the year a child is born. The legislation also seeks to triple the value of the Earned Income Tax Credit and expand its eligibility to include younger workers aged 19 to 24 and older workers over 65 who do not have children at home.

To offset the costs of these tax cuts, the bill proposes raising revenue through several changes to the corporate and high-income tax systems. These measures include increasing the top two individual income tax rates, raising the corporate tax rate, and increasing taxes on corporate stock buybacks. The bill also aims to tighten limits on executive compensation deductions and strengthen overall corporate tax enforcement to ensure the wealthiest individuals and large corporations pay a larger share.