Aldermen still debating Chicago's head tax on companies

July 28, 2011

Chicago aldermen are continuing to negotiate what's known as the city's head tax. Mayor Rahm Emanuel campaigned on getting rid of the tax, which is imposed on businesses with 50 or more employees. As it is, companies must pay the city $4 per month for each full-time employee on the payroll.

Alderman Brendan Reilly says the tax hurts small and mid-sized businesses.

"Symbolically, this sends a message to employers: Chicago is not the place to expand," Reilly said Wednesday at a city council committee hearing. "And I think we should be celebrating the expansion of our workforce and the hiring of individuals rather than penalizing people for it."

Aldermen are debating whether to phase out the tax over the next four years or do it sooner. The city collects about $20 million from the tax each year.