CHICAGO
06/10/2011 11:15 am ET Updated Aug 10, 2011

Chicago Head Tax Would Be Eliminated Under Proposed Ordinance

Rahm Emanuel's feet could soon be put to the fire on a major campaign promise, thanks to an ordinance proposed in the City Council to eliminate Chicago's head tax.

Alderman Tom Tunney resumed a push he's been making for most of his nine-year aldermanic career on Wednesday, re-introducing a bill that would phase out the city's $4-per-employee monthly tax on businesses with 50 or more employees.

“We’re gonna bring in businesses to hear what a negative impact it has on their ability to hire new workers," Tunney said, according to the Chicago Sun-Times. "The most important thing we can do is to provide every incentive for people to add to their payrolls. This could be a job creator, which would help the business climate and, ultimately our budget issues.”

CBS Chicago reports that the city would lose roughly $5 million a year for each of the next four years if the tax was phased out -- it pulls in around $20 million annually. And while Emanuel pledged during his mayoral run that the head tax would be eliminated, that prospect may seem somewhat more difficult given that the city is facing an over $600 million deficit, and revenue sources aren't easy to come by.

This isn't the first time opponents have tried to end the head tax, which was brought in by Mayor Richard J. Daley in 1974. He and his son were both staunch defenders of the tax, despite loud complaints from local businesses, because they saw it as a preferable alternative to a city income tax.

The younger Mayor Daley promised to move toward eliminating the head tax since 1994, but never did so. The closest he came was in 2009, when -- under pressure from Tunney -- he proposed waiving the tax for new hires only, and only for a limited period of time.

Whether or not Emanuel will honor his pledge to eliminate the tax is a question that will play out in the City Council chamber in the coming weeks, as Tunney isn't likely to back down this time.