Chicago Business Owners Are Worried About Yet Another Tax
Chicago’s Democratic Mayor Brandon Johnson has proposed reinstating a “head tax” on large businesses to address the city’s $1.2 billion budget shortfall. This tax woudl charge $21 per month for each employee working at least half the time in Chicago for companies with 100 or more employees, with amounts adjusting for inflation. The previous head tax, in place from 1973 to 2014, was much lower and generated about $20 million annually, whereas Johnson’s plan aims to raise $100 million per year. However, Illinois Governor J.B. Pritzker opposes the tax, arguing it would discourage job growth and make it harder to attract or retain businesses in Chicago. Critics also highlight that Chicago already has some of the highest corporate and commercial property taxes in the country and warn that further tax hikes could drive more companies out amid rising crime and fiscal challenges. They call instead for smarter fiscal reforms and a business-amiable tax climate to support job growth.
As many Chicago businesses flee amid runaway crime and taxes, the Democratic leaders of the Windy City are reformulating yet another way to harvest money from companies.
Chicago Democratic Mayor Brandon Johnson wants to resurrect the so-called “head tax,” which the city nixed more than a decade ago, according to a report from Fox Business.
As of now, the tax would demand a $21 monthly fee per employee from any business with 100 employees or more.
Any employee who works in Chicago 50 percent or more of the time would be counted in the tax system.
The tax would also increase based on inflation rates.
The proposal comes as Chicago faces a substantial budget shortfall of $1.2 billion.
Chicago’s previous head tax, which was in effect between 1973 and 2014, was imposed at a rate of $4 per head.
It dropped to $2 per head in 2012 as now-former Chicago Democratic Mayor Rahm Emanuel phased out the tax.
Johnson’s administration believes the tax would raise $100 million each year, while the previous tax regime raised an average of $20 million each year.
Illinois Gov. J.B. Pritzker, another Democrat, countered Johnson and voiced his opposition to the policy.
“I am absolutely four-square opposed to a head tax in the city of Chicago,” Pritzker remarked on Tuesday, per a report from WMAQ-TV.
The official added that the tax “penalizes the very thing that we want, which is we want more employment in the city of Chicago.”
“It makes it very hard to attract companies from outside of Chicago to come in to Chicago and harder for companies that are in Chicago to stay.”
Chicago, like many other Democrat-run cities, has prompted major businesses to leave because of increasing taxes and worsening violent crime.
Illinois Policy said in an analysis that “Chicago doesn’t need to take another chance on tax hikes that have already failed them in the past.”
The organization noted that businesses in Chicago already pay the third-highest state corporate income taxes in the country, as well as the highest commercial property taxes in the country.
“The city needs structural fiscal reform, smarter spending and a tax climate that supports job growth,” the group added.
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