Chicago Mayor Brandon Johnson proposed a $21-per-employee monthly tax on large companies to help fill a nearly $1.2 billion shortfall. Business leaders and even a former mayor say the “head tax” could kill job creation and new investment.
By Patrick Andriesen | Illinois Policy Institute
Chicago Mayor Brandon Johnson is staring down a projected $1.19 billion budget shortfall for 2026. His solution? Reviving a tax that punishes job creation: a corporate “head tax.”
What is a “head tax?”
A “head tax” charges businesses a fixed fee for each of their employees Under Johnson’s proposed budget, this would cost businesses with over 100 Chicago-based employees $21 a month per worker.
While Johnson’s budget proposal estimates this new tax on job creation would generate about $100 million in revenue next year, and potentially more over time as the fee increases with inflation, business leaders and city officials have long warned it’s “a job killer.”
This wouldn’t be the first “head tax” in Chicago or the first time Johnson has pushed it. Chicago previously levied a $4 per employee “head tax” on businesses with 50 or more workers between 1970 and 2014.
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