**Chicago Mayor Considers Corporate Head Tax to Address Budget Shortfall**
Chicago Mayor Brandon Johnson is exploring the possibility of reinstating a corporate head tax as part of efforts to generate revenue and balance the city’s budget. During a press conference on Tuesday, Johnson indicated that this tax, which is typically assessed per employee, is “on the table” as the city faces consecutive annual shortfalls exceeding $1 billion. Larger corporations would bear a greater burden under this tax structure compared to smaller businesses.
“It’s an option now,” Johnson stated in response to inquiries about the potential levy. “Everything has to be on the table.” The city previously implemented a per-employee tax over a decade ago, but it faced significant opposition from the business community. Former Mayor Rahm Emanuel abolished the tax in 2014, labeling it a “job killer.”
Chicago’s corporate sector has expressed concerns over increasing operational costs and slower economic growth relative to other regions in the U.S. Notable companies, including financial giant Citadel and Boeing Co., have relocated to other states, citing these challenges.
As Johnson develops a spending plan for 2026, reviving the corporate head tax is one of several strategies under consideration. Like many cities, Chicago is grappling with the end of federal pandemic relief and rising costs for labor and services. Additionally, the city faces billions in underfunded pension obligations. A budget working group established by the mayor is currently evaluating new revenue sources, including payment in lieu of taxes (PILOT) for certain institutions.
Johnson, who campaigned on a progressive platform aimed at alleviating the financial burden on the city’s low-income residents, emphasized the need for wealthier individuals and corporations to contribute more. “It’s important that we look at in a very meaningful way how those individuals with means, particularly our billionaires and ultra-rich, who have benefited from a growing economy, can put more skin in the game,” he remarked. “The ultimate goal is to grow the economy. It’s not about billionaires versus everyone else.”
Despite his progressive proposals, some initiatives have struggled to gain support. A recent ballot measure to increase the tax on home sales exceeding $1 million was unsuccessful, and last year, city council members rejected a proposal to raise property taxes by $300 million.
In response to concerns about the economy, Johnson highlighted that corporate relocations are on the rise and that traffic at O’Hare International Airport is increasing. He noted that Chicago ranks among the top cities for the number of millionaires, reinforcing the idea that the wealthy and corporations should contribute to improving public safety and affordable housing. “When corporate leaders come to me, you know the number one issue they talk about is safety,” Johnson said. “They don’t talk about job killing.”
As discussions continue, the potential revival of the corporate head tax remains a significant topic in Chicago’s fiscal strategy.
**FAQ**
**What is a corporate head tax?**
A corporate head tax is a fee imposed on businesses based on the number of employees they have. It typically affects larger corporations more than smaller businesses and is used to generate revenue for local governments.
