![]() ![]() Seattle passed a head tax in 2018 but repealed it one month later under pressure from Amazon, which has its headquarters in the city. He says a tax like the one passed by Seattle last month could bring in at least $150 million a year, while targeting only companies that can afford it. Ginsburg is now suggesting a “tiered business payroll tax” on companies with payrolls over $7 million, applied to salaries over $150,000 a year. RELATED:Ĭountywide income tax could provide ‘revenue that grows with the real economy’ It’s hard for me to see how such a proposal would align with the goal of attracting jobs, particularly for small businesses that might be considering expansion. In recent years some progressive aldermen have called for reimposing the head tax, but at four times its previous level - $16 a month per worker for firms with over 50 employees - turning a blunt instrument into a bludgeon. ![]() It was a blunt instrument, taxing marginal, relatively small businesses at the same rate as huge corporations, which is one reason progressive Mayor Harold Washington called for its elimination, though financial pressures prevented him from carrying out that pledge. It varied slightly over time, but before Mayor Rahm Emanuel began phasing it out in 2012, it required companies with over 50 employees to pay $4 a month for each worker. Daley in 1973, after his proposal for a financial transaction tax was shot down. The head tax was originally imposed by Mayor Richard J. In the short term he suggests a graduated payroll tax, a significant refinement on the old idea of a head tax. Ultimately, this will require something like the city-county income tax Ginsburg has previously proposed. “Finding new sources of revenue and rethinking government structures are the only way out without big layoffs and service cuts,” Ginsburg writes in his new policy blog, Details Matter. Meanwhile, Mayor Lori Lightfoot’s program to invest in South and West Side communities now has the added challenge of trying to dig out of an economic recession. For one thing, the new casino that was supposed to help fund the city’s huge pension debt has receded further into the future, and no one knows what tourism - on which the casino would depend - will look like in a post-pandemic world. And it means next year’s city budget, which must be approved by the City Council this fall, is likely to face a preliminary deficit of $1 billion, according to independent policy analyst Robert Ginsburg, director of the Center on Work and Community Development. And even then, it will take weeks and months to arrive at the local levels where it is so desperately needed.įor the city of Chicago, that means a budget deficit this year of at least $700 million, according to city estimates. Right now it looks pretty unlikely that the federal government is going to step up with the kind of financial relief that states and cities need in the face of our combined health and economic crisis - perhaps until a new administration is installed next year. ![]()
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