Mayor Brandon Johnson wants to bring back a version of Chicago’s old “head tax” AKA the job killer.

His plan is to charge companies an additional $21 per employee per month if they have more than 100 employees. This would affect thousands of companies that operate in Chicago.

It’s pitched as a way to raise new revenue ($100,000,000) from large employers but risks sending a signal that hiring in Chicago comes with a penalty.

Why would we penalize companies that bring jobs to Chicago, invest in office space, and support local businesses. If they hire fewer people, the effects ripple across the entire city: fewer jobs, slower growth, and higher rents.

Nearly 400,000 jobs (one third of Chicago’s private sector workforce) would be hit by this tax.

The last time Chicago tried this, it didn’t go well.

Chicago used to have a head tax.

The original was introduced in 1973 and it charged $4 per employee per month for firms with 50 or more full-time workers.

By 2011, nearly 2,700 companies were paying it, generating around $35 million a year. Then-Mayor Rahm Emanuel called it a “job killer” and promised to phase it out to make Chicago more competitive.

Our city’s job growth had stalled and the Federal Reserve Bank of Chicago reported that by 2011, local job creation had “returned to near zero.”

Emanuel cut the tax in half to $2 per employee in 2012 then fully repealed it by 2014.

The move wasn’t just about lost revenue, it was also about reputation. Major employers like Caterpillar, United, and Motorola had already warned that Chicago’s tax climate made expansion harder, and we couldn’t afford to lose more corporate anchors.

The year after the repeal, job growth improved. Chicago added 33,600 jobs between 2013 and 2014. Illinois as a whole added about 103,000 jobs that year, ranking fourth among states.

The message mattered. Repealing the head tax signaled that Chicago wanted employers to hire and grow here. Bringing it back now, especially at a higher rate and threshold, risks undoing that progress.

If Chicago reintroduces a head tax, it would discourage hiring within city limits at a time when job creation is already fragile.

The smarter path is pairing stable revenue with pro-growth incentives that make it easier to build, hire, and stay in the city.

We should be focused on bringing jobs back to Chicago, not taxing the ones we already have.

This Saturday, we’re bringing AI engineers together for a hands-on hackathon exploring Model Context Protocol (MCP) which is a new open standard that lets AI securely access and act on real-world data.

We’ll build agents that use Chicago’s open source municipal data to create real solutions for Chicagoans. This is perfect for anyone excited about AI, urban systems, and open data:

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