Paul Vallas: Chicagoans will pay for Brandon Johnson’s ‘tax the rich’ agenda

Residents would face higher taxes and fees under his proposed budget.

Facing an $882.4 million budget shortfall, Mayor Brandon Johnson proposed a $17.6 billion budget for 2027 that he says is funded by “responsible spending cuts that protect essential services and by asking wealthy corporations to pay their fair share.”

But his proposal increases spending and raises taxes that will reach Chicagoans regardless of their income. Naming it a “Fair Share Budget” avoids explaining how those taxes work — or who ultimately pays them.

Johnson again wants a head tax, this time $25 per employee per month on companies with more than 125 full-time employees, with an offset credit for employees who work in disadvantaged areas. That’s a $300 annual charge per employee, making it more expensive to employ people in Chicago. He’s proposing this despite a group of 29 aldermen telling him last month that they would not support a head tax.

Johnson also again proposes raising the personal property lease transaction tax on cloud computing and software, which he did last year. The city increased the rate from 11% to 15% as of Jan. 1, 2026. Johnson wants to raise it to 20% next year, a move his office projects would bring in $235 million.

That makes it a major revenue source. It does not make it a tax reserved for the rich — it is not tied to income. A neighborhood business that relies on hosted software is not a technology giant. Neither is a freelancer paying for digital tools.

For larger companies, when a taxable subscription carries an additional charge, that cost can land on the customer. Higher software costs also give employers another reason to reconsider hiring, investment and business-location decisions. Johnson cannot dismiss the concern merely by repeating that the tax is aimed at “big tech.”

Johnson’s characterization of these measures as taxes on large corporations, big tech and the ultra-rich is misleading. These taxes are not based on profits or ability to pay. Businesses can pass the costs along through higher prices, while workers risk fewer job opportunities as employers absorb another expense.

Some of his proposals reach directly into residents’ pockets. ​​Despite Johnson’s “tax-the-rich” rhetoric, Chicago residents face several new fees and taxes if his budget is passed. The mayor is counting on $18 million from the expansion of the city’s Smart Streets program, which automates ticketing for cars illegally parked in bike and bus lanes.

Furthermore Johnson wants a 15-cent tax on packages, with exceptions for takeout food and medicines, and a higher tax on liquor purchased for off-site consumption. Neither distinguishes a wealthy household from someone living paycheck to paycheck.

The mayor also wants to nearly double the tax on sports betting. Together, his proposed tax and fee hikes would bring in an estimated $427 million.

Meanwhile, Chicago Public Schools remains deeply entangled in the city’s budget choices. Johnson’s proposed a $522 million surplus from tax increment financing districts that would send more than $286 million to CPS. Even though the district has regularly received increases in state funding and property tax revenues and got $2.8 billion in COVID relief, Johnson continues to ask for more.

The group of aldermen that preemptively said no to a head tax urged Johnson to identify savings and efficiencies in city government.

The city paid Ernst & Young $3.2 million for a 2025 report that identified $530 million to approximately $1.4 billion in potential savings and additional revenue. Some recommendations would take years to implement. They are not guaranteed cash available to close one year’s deficit, but neither are they an excuse to avoid examining the city’s operations.

Instead, Johnson proposes increasing corporate fund spending by $288 million while relying on $231 million in one-time revenue. He also wants to borrow $480 million for anticipated police misconduct settlements.

It’s clear that Johnson and his supporters have no appetite for attacking the spending side of the city’s financial crisis, and the City Council has limited capacity to propose its own budget or scrutinize the mayor’s. Neither is there a desire to reduce subsidies to CPS or even evaluate the school district’s spending. The mayor and his supporters want more spending.

Johnson can keep calling his approach “tax the rich,” but a tax should be judged by who pays it and what it costs them. His budget would make everyday purchases, running a business and employing Chicagoans more expensive.