Republicans propose tax cuts, Governor says he has concerns

Statehouse Republicans today unveiled an “Iowa Growth Initiative” which outlines a series of targeted tax cuts amounting to about eight million dollars. Representative Jamie Van Fossen, a republican from Davenport, helped craft the package. Fossen hopes the cuts will boost Iowa’s economy and start economic growth. One proposal would let employees accept stock options in their company, without paying capital gains taxes. Another would give businesses that provide childcare services to their workers a tax credit. Senate Republican Leader Stewart Iverson of Dows says the G-O-P hopes democrat Governor Tom Vilsack and others back the package. Another of the G-O-P’s tax breaks is aimed at boosting the amount of ethanol sold in Iowa. Gas station owners who have ethanol account for more than 60 percent of their sales would get a tax credit.Governor Tom Vilsack says he has a “couple of concerns” about the G-O-P tax cut proposals. Rather than tax breaks for businesses, Vilsack wants to focus on tax cuts for individuals. Vilsack wants to eliminate so-called “federal deductibility” which lets Iowans deduct their federal taxes before calculating their income for state taxes. Vilsack says it artificially inflates Iowa’s income tax rates when they’re compared to other states.Iowans for Tax Relief, a republican-leaning interest group, is staunchly opposed to getting rid of federal deductibility. The group helped shoot the idea down in 1986 when former Governor Terry Branstad, a republican, suggested getting rid of it.