For Immediate Release: September 29th, 2025
Media Contacts: Julie Dworkin, julie@i4pg.org, (785) 331-9039
The Institute for the Public Good (IPG) today released a new report, Modernizing the Head Tax, showing that Chicago could raise over $400 million annually by reviving and updating the “Head Tax.”
First enacted in 1973, the Head Tax required corporations with 50 or more employees to contribute a modest monthly fee per worker. Contrary to claims that the tax was a “job killer,” new analysis of employment data shows no evidence that its repeal in 2014 boosted job growth. Instead, the repeal served as corporate welfare, sacrificing public revenue while Chicago families were left to shoulder higher property taxes, fines, and fees.
“Chicago is not broke,” said Ishan Daya, co-director of the Institute. “But we act like we are when we keep protecting billion-dollar corporations and balancing the budget on working people. A modernized Head Tax could bring in $400 million a year — without touching groceries, property taxes, or small businesses.”
The report proposes a modernized rate of $40 per full-time employee per month, adjusted for inflation and corporate tax cuts since the tax was first enacted. It also recommends exempting small businesses, nonprofits, and grocery stores.
At a time when City Hall is floating regressive options like new garbage fees and property tax hikes, IPG argues the Head Tax is the clearest path forward.
“The choice is simple,” said Julie Dworkin, co-director of the Institute. “We can keep nickel-and-diming families — or we can ask corporations that benefit most from our city’s infrastructure, transit, and workforce to pay their fair share.”
Link to report is here.
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Institute for the Public Good is a non-partisan policy institute that strengthens the public good by releasing research and supporting legislative efforts that advance racial equity and economic justice. We define a public good as a resource, service, or benefit that is accessible to everyone in society, and is supported through public funding and operation. Expansion of the public good is necessary in creating a society that supports the basic needs of everyone within it, while creating and sustaining robust services that work effectively for all of us.