Bloomberg: “A group backed by financier Michael Sacks has started funding ads against Chicago’s plan to bring back a tax on large corporate payrolls, drawing the ire of Mayor Brandon Johnson.”
Johnson, who is struggling to pass a budget before the Dec. 31 deadline, has proposed charging companies with at least 100 employees a tax of $21 per worker per month. The tax, once dubbed a “job killer,” would raise $100 million for community-safety programs.
Johnson said the proposed tax would affect only the top 3% of large corporations in Chicago.
Other business and political leaders have also previously opposed the plan. Illinois Governor JB Pritzker, a billionaire Democrat, said in October that the proposed levy would repel major employers. Restaurant owners including McDonald’s Corp. have also said it would discourage jobs in the city.
Chicago is facing a $1.2 billion fiscal gap in its main operating fund as pandemic-era aid winds down while salary, material and pension costs increase. Johnson, who has been reluctant to cut spending, is also not finding support from members of the city council, which needs to sign off on the budget to approve it.
Tax Analysts (Billy Hamilton): A Windy City Tax Dilemma
Hamilton examines the budget battle brewing in Chicago, finding that the city has put itself in a position where painful cuts and tax increases are both desperately needed.
Related scholarship:
Andrew D. Appleby, Targeted Taxes: Localities Take Aim at Large Employers to Solve Homelessness and Transportation Challenges, 98 Or. L. Rev. 477 (2020).
This Article begins by examining the recent local targeted tax provisions, which have crucial distinctions in motivations and mechanics. The Article then undertakes a tax policy and constitutional analysis of these targeted taxes, and considers whether they are properly characterized as a tax or a fee. The Article concludes with several proposed alternatives that will generate the requisite revenue — and may serve an expressive function — more effectively than targeted taxes.
