Chicago Mayor: Stupid Tax Ideas as the City Stares into the Abyss

Are we looking at the endgame? Well, not quite yet.

Let me lead with the news item.

16 Oct 2025, Chicago Sun-Times: Mayor Johnson’s $16.6B budget would revive corporate head tax, tax social media companies

Mayor Brandon Johnson Thursday delivered on his promise to “challenge the ultra-rich” and make corporations pay their fair share, proposing a $16.6 billion budget for 2026 that includes $586.6 million in progressive tax and fee revenues and a record $1 billion tax increment financing surplus to rescue the city and Chicago Public Schools.

The tax-heavy budget, which aims to erase a $1.15 billion shortfall, would hit Chicago businesses hard. It includes a revived and dramatically expanded employee head tax, a second consecutive increase in the tax on cloud computing, a first-of-its-kind social media tax and a broadening of the city’s amusement tax to include online sports betting.

In his budget address to the City Council, Johnson said Chicago is the 10th-wealthiest city in the world, with 127,000 millionaires and 24 billionaires — while 1 in 4 Chicagoans under the age of 18 are mired in poverty.

“Our budget proposal asks large corporations and the ultra-wealthy to chip in more so that working families are not burdened with higher property taxes or grocery taxes or garbage fees,” Johnson said. “This intense and growing wealth inequity is not sustainable for our city.”

The old $4 per month per employee head tax, applied to companies with more than 50 workers, rankled businesses and ultimately was phased out by Mayor Rahm Emanuel in 2014.

The tax would be rebranded as a “community safety surcharge” and revived at a rate more than five times higher than it was — as if it had been retained and raised each year to match the rate of inflation. But the new $21 per month per employee fee would only apply to companies with more than 100 workers. That’s about 3% of Chicago companies.

The expanded tax would raise $100 million in annual revenue, though business leaders say it could stifle hiring, discourage corporate expansion and trigger a business exodus from Chicago.

Now, let’s hang on for a minute anti-Aesop, let’s stop counting those non-hatched eggs.

I love how numbers get thrown around without any context. First — let’s consider the “it’s only 3% of Chicago companies!”

Sorry, guys, I know this trick.

• Are you including all the no-employee LLCs as companies? (Owner-only) I’m going to assume yes. There are LOADS of those.

• What percentage of business taxes and sales taxes comes from those 3% of companies?

It’s hilarious you switch from talking about wealth concentration in billionaires and millionaires (wealth measures, I assume, not income) and then switch to a COUNT metric in the percentage of companies, which probably has a similar concentration of source of tax revenue for the city.

MAYBE DON’T RUN OFF THOSE TAX SOURCES.

Oh, there’s also a social media tax. I’m not even going to address that tax, other than to say I keep having to copy text from various news stories for my Canadian friends for a similar reason.

Because the Canadian government is idiotic (and I love my friends.)

Blast from the past: Seattle head tax, aka Amazon Tax

Before I get back to what’s likely to happen with Chicago, let me remind you of Seattle doing its own hokey-pokey with a head tax on employers!

They were specifically trying to target Amazon (and the state of Washington also tried to target Jeff Bezos, who, as a rich man, had the resources to just move himself to Florida at the drop of a space vehicle… to take care of his parents HE SAID.) Maybe a few other companies, but Amazon was the elephant.

Let’s see my history of posts, and then the update!

• 18 May 2018: Senseless in Seattle: A Panoply of Stupidity

• 19 June 2018: Taxing Tuesday: Mapping Tax Cuts and Laughing at Seattle

• 25 Sept 2018: Taxing Tuesday: Maneuvering to Benefit the Rich, Hope the Suckers Stop Looking, and More

• 7 July 2020: Taxing Tuesday: Seattle Returns to Its Dumbass Idea of an “Amazon Tax”

• 9 Aug 2022: Taxing Tuesday: A Retrospective of Stupid Tax Policy - Soda taxes, Amazon tax, SALT cap

• 7 Nov 2023: Taxing Tuesday: Bezos Moves Back to Florida, Thwarting Washington State’s New Capital Gains Tax, Migration Stats Distorted by Pandemic Issues

The last one is not about the Seattle head tax, but you might be interested in it anyway.

Here is the short version (the links above are so you can check, because I linked to contemporary news pieces):

• 2018: Seattle city council tries a head tax - gets knocked down, but they swear they’ll do it again when people are distracted

• 2020: Seattle city council do it again, when people are distracted (you know, that pandemic thing)

Potential Results for Seattle (Hang in there, it’s relevant)

So here is where it stands — they had to change the terms of the head tax they imposed: (aka Payroll Expense Tax)

May 2025, KIRO: Seattle Chamber of Commerce responds to ‘volatile’ $47M-short payroll tax as jobs leave city

Seattle Mayor Bruce Harrell released his payroll expense tax (PET) report for 2024 on Tuesday and its projections came up nearly $50 million short.

“Today’s announcement that PET revenues collected in 2024 were $47 million lower than projected requires action to ensure our budget remains balanced,” Harrell explained in a statement.

That $47 million lower was about 10% lower (maybe 11%?) than projected, which is substantial.

I will note that sort of magnitude comparison wasn’t in the article.

But wait! Let me jump back to November 2024!

Nov 2024, Axios: Seattle taps JumpStart tax to fill budget shortfall

Seattle City Council approved an $8.5 billion 2025-2026 budget, using JumpStart payroll tax funds to fill a multi-million dollar gap in the general fund.

Why it matters: The reallocation of the controversial payroll tax, which is meant to fund affordable housing, homelessness services, equitable economic development, and climate initiatives, is the largest diversion of those funds since the tax was implemented.

Oh, that supposedly earmarked revenue source was all-of-a-sudden diverted to whatever they needed?

To say that the “Amazon tax” has not performed to the originally-advertised-by-socialists revenue amounts … I have a recommendation to those socialists: have you considered oppressing the kulaks more? Maybe that will work.

Maybe put a few in gulags.

Some Reactions to the Chicago Mayor’s Announcement

Let me pop out the images he posted:

Some people critiqued the graphic design of the above… and boy, I could as well.

Johnson inherited an awful situation when he came in as mayor (which had nothing to do with Trump, and had a lot more to do with the Daleys… but he can’t say that.)

Anyway, whoever came in as the mayor had to deal with the situation as it is… so let’s see what different groups have to say!

One of the big unions put this out:

Nuveen dumped some bonds:

(You might want to read the comments on that thread)

Let’s do a quick check: 500 employees * 12 months * $21 tax per month = $126,000 tax per year. Yep. It checks.

Austin Berg has been all over the various tax components. I will just pull the head tax item (sorry, Austin, not covering the internet stuff right now.)

Click on the tweet for the thread.

Chicago Tribune Editorial: Chicago’s civic-minded business leaders are just fat cats to Mayor Brandon Johnson

We remembered that history when Mayor Brandon Johnson’s news release about his plans for the city budget reached our inboxes. We’d heard rumor of the return of the so-called head tax, a per-employee tax paid to the city that was tied to the number of employees who worked within Chicago boundaries. We were curious to see how much Johnson would propose. But the words “head tax” did not appear in a budget filled with narrative blather and ideological pronouncements.

At first we thought Johnson had enjoyed an epiphany. The head tax is a terrible idea because it gives corporations incentives to move out of the city when Chicago needs to be encouraging precisely the opposite. It tells companies such as Walgreens that they were smart to close their satellite office in the Loop and suggests others should think about doing the same. It incentivizes businesses not to add workers in Chicago, which means not adding the very people who shop, eat at restaurants and patronize our ailing transit systems.

Former Mayor Rahm Emanuel understood that the symbolic weight of the tax was also important: when he removed it, he was signaling that Chicago was serious about snagging new corporate headquarters.

Of late, that train has been moving in the other direction. Citadel has left, Boeing has left. With a big tax, it could become an express.

But where was Johnson’s head tax we were told was coming?

A-ha! Found it. It’s sneakily disguised as something called a “community safety surcharge,” aiming to raise $100 million seemingly to do something similar to what the business community already had done of its own volition and for which the city has not held up the funding level agreed last year.

Johnson’s budget applied the tax at $21 a month per employee for any corporation with more than 100 workers (precisely the corporations we need to retain and attract). That is more than five times the old rate. All aimed at precisely the people who had previously stepped up to help.

We hear they are furious. Who would not be?

….

And — here’s the biggest no-no of them all — the city plans to float debt to cover operating expenses, something that Johnson’s finance team has ensured skeptical aldermen in past debates over future borrowing they wouldn’t do. The budget would debt-finance $90 million in settlements over past police misconduct and another $185 million owed to Chicago firefighters in back pay per a recently settled union contract — a total of $275 million.

With credit clouds hanging over this profligate administration, we can only imagine how those bonds will be greeted when they’re floated next year.

To Come…

No, this is not the beginning of the end.

I’m no Churchill (though I may share his drinking proclivities.)

Chicago’s problems are not unique to Chicago. We’re seeing these problems erupt in France, California, in greater Illinois, in New York (sob!), and in South Korea and Japan…. and it’s tough to see what’s going on in mainland (communist) China.

But in pretty much all of the places I’ve listed — they’ve all refused to deal with their central problem … demographically, at the very least.

So. I’m saying this is a developing situation.

I’m a very patient person. I’ve been watching this stuff since about 2005… and it’s 2025, so…..

Look, it takes a lot of time for a city to collapse, unless there are barbarian hordes actively invading.

Oh.