Alders push back on mayor's new head tax proposal
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A group of alders on Tuesday rejected Mayor Brandon Johnson's new plan to impose a head tax only on companies with more than 500 employees.
Why it matters: The opposition suggests further heel digging in a standoff that risks city government shutting down if no deal is made by the end of the month.
Zoom in: Johnson's move amends his earlier proposal to impose a head tax for companies with 100+ employees at a rate of $21 a month per employee, and raises it to 500 employees at $33 per month, per employee.
- The mayor's office says the city hosts about 175 companies of this size.
- The initial tax proposal was predicted to raise $100 million and the new one is expected to generate $82 million.
What they're saying: The mayor's office says companies included would be CitiGroup, T-Mobile and Mondelez, for example. These are businesses that the administration notes would pay taxes that amount to about 0.01% of the tax breaks they are receiving under the Big Beautiful Bill.
The other side: "The head tax is a nonstarter. If it's put up for a vote, it'll fail," Ald. Matt O'Shea (19th) tells Axios. "Raising this threshold now to companies with 500 more employees, those are the companies that can relocate. And they'll leave."
- "Illinois already has the third-highest corporate income tax rate in the nation, and Chicago businesses pay the highest commercial property taxes in the country," Ald. Nicole Lee (11th) added.
What's more: "Chicago ranks 19th out of the 20 largest U.S. cities in racial unemployment equality, with Black residents more than three times as likely to be unemployed as white residents," Ald. Felix Cardona (31st) said, suggesting that the tax would further drive out jobs.
What's next: The City Council and mayor have until the end of the month to agree on a budget.
