Chicago Mayor Brandon Johnson wants to close nearly half of next year's $1.19 billion deficit with new or higher taxes on large corporations, big tech companies and the rich.
The first-term Democrat on Thursday is proposing roughly $586.6 million in additional revenue from various types of companies and business activities. His plan would bring back a so-called head tax, which would levy $21 per employee per month on companies with at least 100 employees to raise $100 million to support community safety programs.
Companies that could end up paying more depending on how the proposals are ultimately structured include: Amazon Inc., JPMorgan Chase & Co., United Airlines Holdings Inc., Walmart Inc. and others that have a significant presence in the city. Johnson also wants to launch a social media amusement tax, raise the levy on
"Instead of asking our residents to sacrifice even more, we are asking large corporations and Big Tech companies that have made trillions of dollars to pitch in a little bit more," Johnson said in his prepared remarks. "Instead of asking Woodlawn and Englewood and Uptown to pay more, we are asking Google and Amazon and Microsoft to put more skin in the game."
The proposed new or higher taxes come as Johnson has limited options to find more cash as he tries to make up for
Past opposition
The business community has already opposed several of the proposals in the past. Johnson wants to raise the tax on cloud computing for the second year in a row. That, along with other levies, would help boost revenue by $333 million. The social media amusement tax seeks to raise $31 million to support crisis response and mental health services.
The money generated from the head tax would be put into a separate fund, and the costs of the community safety programs it would support could shift out of the city's main operating fund, which faces back-to-back years of deficits as revenue lags costs. Johnson said the head tax would only apply to the top 3% of businesses in the city.
A previous $4 corporate
"It's not a job killer. It's a job creator," said Johnson, who added that he is addressing public safety, a top concern of the city's business community.
Johnson has been pushing since his campaign days for corporations and wealthy residents to pay more to reduce the burden on the city's working class residents and the neediest. His past efforts to raise taxes on the rich failed. The city's voters rejected raising the levy on the sale of higher priced homes to help reduce homelessness and before that, a ballot measure to shift the state from a flat to a graduated income tax failed.
The city council also unanimously rejected Johnson's plan last year to raise property taxes by $300 million. Johnson this time did not include a property tax increase to balance the 2026 budget. The budget needs the approval of the city council.
The mayor noted that the city's economic development funds — called tax increment financing districts — are expected to provide a record $1 billion surplus in the fiscal year beginning in Jan. 1, with about half the money going to Chicago Public Schools and the remainder funneled to other taxing bodies including the city, park district and city colleges.
To reduce costs by roughly $200 million, Johnson is also proposing to limit police overtime, a one-year hiring freeze and tech upgrades to improve efficiency. The city also plans to make a supplemental payment toward its underfunded pensions, but the amount would be smaller in 2026 than in previous years partly because casino revenue will be less than previously forecast.
The mayor is also proposing issuing bonds to fund infrastructure, housing and economic development and refunding to lower debt costs. He wants to sell debt to spread out one-time costs for settlements and judgments over five years, and help cover retroactive payments for a union contract over three years.
