Van Hollen, Booker Roll Out Plans to Eliminate Income Taxes for Millions

A new competition over tax cuts is emerging inside the Democratic Party as potential presidential contenders unveil proposals aimed at allowing millions of Americans to pay little or no federal income tax.

Sen. Chris Van Hollen, D-Md., plans to propose eliminating federal income taxes for individuals earning less than $46,000 and married couples earning under $92,000, a threshold he describes as a "living wage," according to The Wall Street Journal.

The plan would exempt roughly half of U.S. workers from federal income taxes and expand relief for millions of middle-class households.

Under Van Hollen's proposal, additional middle-income taxpayers would still pay federal income taxes but would receive smaller reductions, while the cost of the policy would be offset by new surtaxes on high earners.

The Maryland Democrat has proposed a new tax on millionaires that would apply additional rates of 5% on income above $1 million, 10% above $2 million, and 12% above $5 million.

Meanwhile, Sen. Cory Booker, D-N.J., has introduced a competing proposal called the "Keep Your Pay Act," which would more than double the standard deduction to $37,500 for individuals and $75,000 for married couples filing jointly.

If enacted, Booker's plan would allow households to avoid paying federal income taxes on the first $75,000 they earn, reducing tax bills for many middle- and lower-income families.

The legislation would also expand several family-focused benefits, including the child tax credit and the earned income tax credit, which are designed to boost after-tax income for working families.

Both lawmakers are considered center-left members of the Democrat caucus and are widely viewed as potential contenders for the party's 2028 presidential nomination.

Their proposals reflect an early debate within the party over how Democrats should reshape their economic message following the 2024 election.

President Donald Trump campaigned on several "no tax on" proposals aimed at specific groups of workers, including plans to eliminate federal income taxes on tips, overtime pay and benefits received by senior citizens.

Some Democrats later embraced elements of that message during the campaign.

Then-Vice President Kamala Harris, the Democrat nominee in 2024, ultimately supported eliminating federal income taxes on tips, though the broader Democrat platform continued to focus on raising taxes on wealthy households and corporations.

Party strategists and lawmakers have since debated whether Democrats should lean more heavily into broad tax relief for working- and middle-class voters.

Supporters of the new proposals argue that offering larger, more visible tax cuts could help Democrats connect with voters facing higher living costs.

"We shouldn't be afraid of talking about a tax cut for working people that's paid for by making big corporations and the wealthiest few pay their fair share," David Bergstein, a spokesman for Booker, said in a statement.

Still, some Democrat policy experts warn that large middle-class tax cuts could limit resources available for other priorities.

"There are some serious trade-offs that are going to be made, and I worry that proposals like this simply are not prioritizing correctly a limited set of fiscal resources," said David Kamin, a former tax policy adviser to Democratic presidents.

Both Democrat proposals attempt to address that concern by pairing tax relief for lower- and middle-income households with higher taxes on the wealthiest Americans.

Even so, critics say directing large amounts of new revenue toward tax cuts could crowd out funding for initiatives such as child care, paid family leave and strengthening Social Security as federal debt remains near historic levels.

With the next presidential primary still more than two years away, the competing proposals are already shaping what some Democrats are calling an early "ideas primary" over how the party should define its economic agenda for the next election cycle.