News & Media
Statement: Institute for the Public Good Responds to Chicago Budget Report
The Financial Future Task Force report leans on regressive fees, worker cuts, and state-imposed limits—instead of maximizing proven progressive revenue sources like the head tax.
For Immediate Release: September 16, 2025
Media Contacts: H Kapp-Klote, 785-331-9039, kappklot@gmail.com
Statement: The Financial Future Task Force report leans on regressive fees, worker cuts, and state-imposed limits—instead of maximizing proven progressive revenue sources like the head tax.
Today the City of Chicago’s Financial Future Task Force Work Group released their recommendations for addressing the city’s budget gap. As a member of this working group, the Institute for Public Good focused on building a budget that would protect Chicago families, preserve the city’s social safety net, and challenge the ‘business as usual’ fiscal strategy that keeps Chicago reliant on regressive fines and fees instead of investing in the future of our city by asking the wealthiest and most profitable in our city to pay their fair share.
Unfortunately, the report continues Chicago’s decades-long reliance on regressive strategies: raising fees and fines on everyday people, cutting worker pay and benefits, and sidestepping the responsibility of the large corporations and institutions in our city. Of the 23 new revenue ideas that Chicago has the power to implement, only 5—just 11% of the revenue—target those with the greatest ability to pay. The rest lean heavily on higher property taxes, garbage fees, grocery taxes, and inflated costs that affect those with less, the most.
IPG was also disappointed to see, in a time when cuts to federal funding are creating an existential crisis for state and local governments across the country, that many of the working group’s proposed “efficiencies” come directly from the workforce through furloughs, and reduced health care for city workers. The group also overlooked real efficiencies like eliminating more than 1,000 long-standing vacancies in the police department—a step that could free $150–200 million. Even with the help of Ernst & Young’s analysis, the group identified less than 40% of the budget gap in savings, underscoring the fact that Chicago cannot cut its way out of this crisis.
Though there are glimpses of progressive revenue in the report, including a return of the head tax, voluntary payments from larger non-profit institutions that don’t pay property taxes, and licensing fees for corporations, it is clear that Chicago’s options for raising revenue are constrained by state law – with most city-controlled tools being regressive, making life less affordable for working people.
That is why we must both push the state to allow the city to enact progressive policies, and maximize the progressive options we do have. Chief among them is reinstating the corporate head tax, which Rahm Emanuel phased out in 2012. Properly updated for inflation and modern corporate tax breaks, a head tax could generate over $400 million annually while exempting small and medium businesses, nonprofits, and grocery stores. Making this shift to emphasize taxing those who can most afford to pay, could eliminate most of the proposed fees, fines, and taxes on every day Chicagoans.
Even the recommendations that did require Springfield action, where the power to tax progressively can be granted, were largely focused on regressive consumer fees and did not include progressive options like a payroll expense tax similar to what was adopted in Seattle that could generate over $1 billion in Chicago.
Chicago is at a critical juncture: We are facing a large budget deficit, cuts from the federal level, growing needs of residents as critical services are abandoned, all while corporate profits soar. The budget work group report shows that cuts alone will not be possible, and that Chicago’s hands are largely tied by the state when it comes to progressive revenue.
We cannot cut our way out of this budget crisis. We cannot balance the budget on the backs of working people. We must choose the third way – maximize progressive revenue options, like the head tax, and optimize the budget in places that don’t harm workers or impact the services upon which everyday Chicagoans rely.
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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.
New Report: Tax on High Corporate Payrolls Could Raise $1.5 Billion to Help Close Chicago’s Budget Gap
"In Chicago, some CEOs make over 1,000x their median worker. A new proposal from the Institute for the Public Good says it's time to tax that difference to solve Chicago's budget crisis."
For Immediate Release: July 23, 2025
Media Contacts: H Kapp-Klote, 785-331-9039, kappklot@gmail.com
New Report: Tax on High Corporate Payrolls Could Raise $1.5 Billion to Help Close Chicago’s Budget Gap and Tackle Inequality
"In Chicago, some CEOs make over 1,000x their median worker. A new proposal from the Institute for the Public Good says it's time to tax that difference to solve Chicago's budget crisis."
A new report from the Institute for the Public Good proposes a bold solution to Chicago’s deepening fiscal crisis: a Corporate Income Inequality Tax targeting corporations that spend millions on ultra-high executive pay.
The report shows how a corporate excise tax on the privilege of doing business in Chicago measured by 5% of the cost of payroll for employees that earn more than $200,000 on corporations with more than $8 million in annual payroll can generate more than $1.5 billion in new revenue for the city. It would also create a Small Business Growth Fund—$50-$100 million annually in grants and revolving loans, supporting the very businesses that have anchored our neighborhoods for generations but have struggled to compete against deep-pocketed corporations and big-box chains.
At a time when Chicago ranks fourth in the U.S. for number of millionaires, yet one in five residents experiences food insecurity, the city faces a choice: continue down a path of austerity or hold high-profit corporations accountable and fund a future rooted in equity, not cutbacks.
Corporations have been benefiting from the largest tax cut in U.S. history under the Tax Cuts and Jobs Act of 2017 and studies have revealed that benefits flowed only to the very top—49% to firm owners, 11% to executives, and 40% to high-income workers (those in the top 10% within their firms). No benefits were seen by low-paid workers.
“For decades, Chicago has let big corporations off the hook while slashing public services. Chicago can’t afford to leave money on the table for city services that keep our communities safe, healthy, and livable,” said Julie Daya, co-director at IPG. “This report shows how taxing corporations with extreme executive compensation could help support everyone in Chicago when it comes to housing, safety, and care.”
The proposal mirrors Seattle’s JumpStart Tax, which has exceeded revenue expectations since 2020—generating over $1.2 billion in four years and helping fund affordable housing, childcare, and green infrastructure.
A similar Corporate Income Inequality Tax in Chicago could help fill Chicago’s historic $1.2 billion budget shortfall driven by past mismanagement, federal cuts, and deepening economic inequality.
“Corporations can afford to contribute more—especially those with CEOs making 1,000 times what their workers make.” said Julie Dworkin, co-director at IPG.“We know what works. We just need the will to do it.”
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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.