Chicago, Illinois — Business and retail groups across Chicago are voicing strong opposition to the 2026 budget proposal unveiled by Mayor Brandon Johnson, warning that the plan’s new tax measures could harm local businesses, slow economic recovery, and stifle job growth.
The $16.6 billion “Protecting Chicago” budget includes several new revenue measures — from a corporate head tax to fees on sports wagering, social media, and Big Tech, as well as higher vacant building fees and a proposed “yacht tax.” While the administration has promoted these initiatives as part of a strategy to close a $1.15 billion deficit, business leaders say the city’s approach could do more harm than good.
Concerns Over Job Growth and Economic Impact
The Illinois Retail Merchants Association (IRMA) quickly raised alarms, arguing that the corporate head tax — which charges employers per worker each month — would discourage companies from hiring new employees.
Rob Karr, president and CEO of IRMA, said the plan risks making Chicago less competitive and could lead to more empty storefronts.
“Taxing job creators won’t drive economic growth or improve public safety. What we need are real, immediate solutions—not budget gimmicks or political blame games,” Karr stated.
Karr added that while the mayor claims the tax only targets large corporations, it would also affect mid-sized businesses like grocery stores and restaurants employing 100 or more workers.
“Even if it were just the largest corporations, it’s still bad public policy,” he said. “It disincentivizes hiring and sends a message that success is punished.”
Pushback on Social Media and Big Tech Taxes
Business groups also criticized the social media tax, arguing that it would add new costs to small businesses already struggling to market themselves online, as per The Center Square.
“Social media is one of the most effective and affordable marketing tools for small businesses,” Karr explained. “Adding taxes to that will only worsen Chicago’s business development challenges.”
The Illinois Chamber of Commerce echoed those sentiments, expressing “deep concern and disappointment” over multiple provisions in the budget.
In a formal statement, the Chamber said:
“Proposals to revive an outdated and harmful head tax, increase the cloud tax, and create a flawed social media tax place Chicago at a competitive disadvantage nationally.”
Community and Political Reactions
While the Chicago Teachers Union (CTU) praised the budget as “transformative” and supportive of working families, other city stakeholders urged caution.
The Fraternal Order of Police criticized city spending priorities, arguing that taxpayer money should focus more on local citizens rather than federal or immigration-related expenses.
During the city council’s public comment period, FOP President John Catanzara Jr. said,
“You’re using city dollars for everyone else while we’re facing a billion-dollar hole.”
What Comes Next
The Chicago City Council faces a December 31 deadline to review, amend, and approve the 2026 budget. Debates over taxation, spending, and long-term economic sustainability are expected to dominate discussions in the coming weeks.
If passed as proposed, several of the new taxes — including the corporate head tax and social media levy — could take effect as early as January 2026.
While city officials argue that new revenue sources are essential to balance the budget, business leaders are calling for long-term growth strategies instead of short-term fixes.
What do you think about Chicago’s proposed business taxes? Should the city focus on raising revenue or reducing spending? Share your thoughts in the comments below.
