Chicago Mayor Proposes Job-Killing Head Tax to Cover Budget Shortfall

As Chicago hemorrhages jobs and businesses, Mayor Brandon Johnson’s solution is simple: tax what’s left.

In a stunning move that has local business leaders sounding the alarm, Johnson is proposing a revival of the city’s long-defunct “head tax” a levy that charges employers for simply hiring people. Under the new plan, companies with more than 100 employees would be forced to pay $21 per employee per month, a rate that would increase annually with inflation.

The tax would apply to employees who work in the city at least 50% of the time, and is expected to generate roughly $100 million per year. The stated purpose? To help plug a $1.2 billion budget hole a financial black hole created by decades of reckless spending, bloated bureaucracy, and failed progressive policies.

But business leaders say this move will only make things worse.

“It’s going to kill jobs,” warned Illinois Restaurant Association President Sam Toia, who told FOX Business that restaurants are already barely surviving on "pennies and nickels" post-pandemic.

He’s not wrong. The last time Chicago had a head tax from 1973 to 2014 it only generated $20 million annually. And even then, it was widely blamed for stifling job growth and driving companies to the suburbs or out of state.

Johnson’s revival is even more aggressive and comes on top of a slew of other new tax proposals:

• Cloud tax hike from 11% to 14%, projected to raise $333 million

• Expanded rideshare tax targeting high-traffic zones, projected to raise $230 million

• New levies on social media firms, online sports betting, and even yacht mooring

This is the kind of policy cocktail that would make Karl Marx proud and it’s being served in a city already on the brink of economic collapse.

Over the past few years, dozens of major corporations have packed up and left Chicago, citing crime, high taxes, and an increasingly hostile business environment. Just to name a few:

• Citadel the hedge fund giant led by Ken Griffin

• Boeing one of the city’s most iconic employers

• Caterpillar, Guggenheim Partners, TTX, and Tyson Foods all gone or pulling back

These are not minor players they are pillars of Chicago’s economic foundation. And they’re not just moving to Indiana or Iowa. Many are leaving the state entirely for Florida, Texas, and Tennessee states with lower taxes, pro-business governments, and safer cities.

Yet instead of rethinking Chicago’s tax-and-spend model, Johnson is doubling down on the very policies that are driving businesses away.

This isn’t just bad economics it’s suicidal governance.

At a time when Chicago desperately needs to attract employers, spur hiring, and foster a climate of investment, its mayor is proposing a tax literally based on how many people you hire. That’s not leadership that’s economic vandalism.

If the head tax passes, don’t be surprised if the exodus accelerates because Chicago isn’t giving businesses a reason to stay. It’s giving them every reason to run.

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