Brandon Johnson’s “Head Tax” Scheme Latest Bad Idea from Flailing Chicago Mayor

Chicago Democrat Mayor Brandon Johnson appears headed for yet another embarrassing rebuke from his own party as his proposed “head tax” in the Windy City is facing stiff opposition from the City Council. Amid Chicago’s dire budget shortfall, Democrats are running headlong into the obvious reality that their enormous social programs, in addition to failing to deliver as promised, are simply too expensive to maintain.

Chicago is currently facing a budget deficit of more than $1.1 billion for 2026, which Johnson incredibly blames on President Donald Trump – despite the fact that Johnson took office in May 2023 and Trump took office just this year. The city’s charter requires that the budget be balanced (at least on paper).

That means Johnson will have to raise new revenue through taxes or impose cuts to government programs and services to fill the gap. But his proposed $16.6 billion budget includes “just $80 million in cuts,” while hammering residents with an additional $671 million in taxes.

Those taxes include a “first-of-its-kind tax on social media companies to generate $31 million,” and increasing the tax on internet cloud services as well as rideshare users in certain areas, according to local news reports. But by far the most controversial proposal is a return of the “head tax,” or imposing a special tax on some businesses in the city for each person they employ.

Under Johnson’s proposal, companies located in Chicago with more than 100 employees would be taxed $21 per worker, per month. The tax would increase annually by five percent or by the increase in the Consumer Price Index (CPI), whichever is smaller.

The head tax idea is not new – Chicago used to have a head tax of $4 on companies with 50 or more employees. But former Mayor Rahm Emanuel phased out this tax in 2014, calling it a “job killer.” Johnson’s proposal would amount to not only a revival but a dramatic expansion of the policy.

As of now, the proposal does not have the support to pass. On October 30, 27 out of 50 alders signed an open letter opposing it. The plan would need at least 26 votes to pass. Johnson is not using the term “head tax” in his budget, instead choosing the term “community safety surcharge.”

This isn’t the first time one of Johnson’s tax-and-spend schemes would be rejected by his own party. As South Side Weekly reported, the City Council rejected his proposed $300 million property tax increase in a rare 50-0 vote last year.

Chicago is in dire financial straits due to years of lucrative promises to city workers and a refusal to make prudent cuts. Instead of consolidating severely underutilized public schools into larger ones, for example, the mayor took $1 billion from a separate fund and transferred it to Chicago Public Schools, where he used to work.

As local media reported, Johnson also will not pursue layoffs because he wants to avoid “a fight with the city’s labor unions, which were likely to vehemently oppose any effort to balance the city’s budget by cutting their members’ pay or eliminating their jobs.” In effect, Johnson is choosing to keep the gravy train rolling to his political allies at the cost of incentivizing companies to cut headcount or leave the city entirely.

During a recent press conference, Johnson struggled to even articulate how his office calculated that the proposal would raise as much as promised, particularly given the rise in remote work. “It’s clear from their answers here that the mayor and Budget Director Annette Guzman did not take into account remote work when creating the $100M revenue estimate,” Austin Berg with the Illinois Policy Institute commented on X. The city used data from 2014, when the tax ended, and then “extrapolated.”

Berg also pointed out that the tax “will uniquely penalize in-office work at a time when downtown is still experiencing record-high vacancy rates.” The Big Tech companies supposedly targeted by this policy, such as Google and Amazon, can easily shift their white-collar workers to other cities that don’t penalize them or make them fully remote.

Those employees then will not be paying tolls when they drive into the city, sales tax on their snacks during work, or tipping waiters when they go out for lunch. But the Johnson administration does not seem to understand this – instead, they are hoping large corporations simply sacrifice their bottom line to funnel even more money to left-wing social priorities and bloated government programs.

As Florida Governor Ron DeSantis put it in a post on X, “I’m going out on a limb here, but it’s probably not a great idea for a struggling city to impose a head tax on employees for all businesses located in the city.”

Chicago’s financial problems are real – pension guarantees, expensive union contracts, and years of out-of-control spending. However, the solution is not to tax the job creators and employees that the city needs to stay there, but to make reasonable cuts and long-term changes to stabilize the budget.

Johnson’s plan probably sounds great to the left-wing activists that formed the base of his 2023 mayoral run. But it would be a disaster for the employers in the city who will be penalized for creating jobs and driving investment.

Matt Lamb is an AMAC Newsline contributor and is an associate editor for The College Fix. He previously worked for Students for Life of America, Students for Life Action, and Turning Point USA. He previously interned for Open the Books. His writing has also appeared in the Washington Examiner, The Federalist, LifeSiteNews, Human Life Review, Headline USA, and other outlets. The opinions expressed are his own. Follow him @mattlamb22 on X.