Vander Plaats blasts Democratic income tax plan

DES MOINES -- Likely GOP gubernatorial candidate Bob Vander Plaats blasted a tax plan being pushed by Democratic lawmakers, saying it could drive businesses out of the state.

In a news conference Tuesday at the Statehouse, Vander Plaats said the plan to eliminate federal deductibility would create too many losers and raise taxes on many Iowans and businesses.

"Right now, in this climate, I think we need to be doing everything we can to enhance or create a climate for productivity in the state of Iowa," Vander Plaats said.

The plan proposed by legislative Democrats would eliminate the ability to deduct what Iowans pay in federal income taxes from their state income tax returns. The plan also would reduce income tax rates across the board, which Democrats are highlighting as a tax cut for middle-class Iowans.

They say lower income tax rates overall would make it easier for businesses to compare Iowa's rates and make the state more attractive to relocating firms.

An analysis of the proposal shows an estimated 667,000 Iowans would see lower tax bills while 450,000 Iowans would see an increase.

Osceola business owner Tony Caligiuri, a Vander Plaats supporter, said the idea that federal deductibility is too confusing for out-of-state businesspeople thinking of moving into Iowa is insulting.

"It's hard enough to get people to move to Iowa sometimes," Caligiuri said. "You take away one more advantage, which is this federal income tax deductibility, it's going to make it a lot tougher."

Vander Plaats said he hopes Gov. Chet Culver keeps his word not to raise taxes in this economic climate.

"As governor, what I would promise to the people of Iowa that we would do everything in our power to allow producers to produce," Vander Plaats said.

Vander Plaats, a Sioux City businessman, has formed an exploratory committee to allow him to raise and spend money for a possible gubernatorial run next year.

He said the tax issue is one of the issues that may motivate him to run