Bar and restaurant owners in the US city of Chicago have voiced strong opposition to Mayor Brandon Johnson’s proposed 35% hike in liquor taxes, warning it could devastate their businesses. The tax increase, part of Johnson’s $17.3 billion 2025 budget plan, aims to raise $10.6 million annually, bringing total alcohol tax revenue to $40.6 million.
Industry leaders argue that the burden is unfair. “We’ve done our part for the city’s coffers,” said Pat Doerr, director of the Hospitality Business Association of Chicago, during a news conference at Haymarket Brewery, as quoted by Chicago Tribune. “This increase is unreasonable and will hurt businesses already strained by past tax hikes, COVID-19 recovery, and inflation.”
Under the plan, taxes on liquor with more than 20% alcohol by volume (ABV) would rise from $2.68 to $3.62 per gallon, while beer taxes would increase from 29 cents to 39 cents per gallon. Critics argue that the higher costs will not only impact businesses but also push consumers in border neighborhoods to shop in suburban areas for cheaper alcohol, according to a Chicago Tribune report.
Hospitality leaders claim the tax is particularly damaging for local businesses with slim margins, such as breweries. “Beer is a volume game, and a tax hike would definitely hinder that progress,” said Damon Patton, co-founder of Moor’s Brewing Companyas quoted by the Chicago Tribune.
This opposition comes amid broader budget challenges for Johnson. The City Council recently rejected his $300 million property tax hike, and critics have targeted his proposed cuts to police positions tied to consent decree reforms. Johnson maintains that collaboration is essential to navigate the city’s financial shortfall.
Johnson has stressed that all city government stakeholders must contribute to resolving the challenging budget process. “My responsibility is to present a budget that’s balanced. Working with the City Council to actually pass that budget requires me to remain as collaborator-in-chief,” he said on Tuesday.
Nevertheless, industry advocates are lobbying aldermen to oppose the liquor tax, warning that it could harm small businesses without effectively closing the budget gap. Mark Robertson, co-owner of 2 Bears taverns, described the plan as “death by a thousand cuts in a post-COVID world,” adding, “City Council doesn’t understand the real world.”
As the budget debate continues, Chicago’s hospitality sector remains determined to fight the proposed tax hike, urging City Hall to explore alternative revenue sources.
