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July 8th, 2009

GOP Gubernatorial Candidates Blast Culver for Flood Related Tax Issue

vanderplaats-and-rants-copyRants: Culver’s Tax Decision Costs Flood Victims Money

Victims from last year’s flooding have joined the growing list of Iowans paying more in taxes thanks to Governor Chet Culver and his Department of Revenue and Finance.

“Last summer when Republicans outlined our plan to provide aid to flood victims, coupling with the federal tax code was on our to-do list. During this past Legislative session, Republicans repeatedly called to update our tax code. Today people are feeling the real pain of Governor Culver’s decision to reject that idea,” said State Representative Chris Rants of Sioux City.”

In 2008 Congress changed the tax code to allow disaster victims to itemize all of their losses and deduct them. The Iowa Department of Revenue advised tax preparers to file as though Iowa law would “couple” or mirror the federal changes. However, Iowa never made the change. Many disaster victims are now are being told that they owe the state of Iowa money.

“It’s not fair that those who were flooded out are being punished today for listening to the advice of their state government. Victims and tax preparers who deducted their flood related losses should be given a tax amnesty from having to pay the tax collector for listening to faulty advice.

“For over a year I’ve been asking Culver and his Democrat allies to couple Iowa’s tax code with the federal tax code. Due to their inaction, many Cedar Rapids families are being asked to pay the price. Now is the time for real leadership in Iowa, so we can finally help flood victims get back on their feet.”

Update: The Vander Plaats Campaign issued a statement on the same matter at 11:25 a.m.

VANDER PLAATS: CULVER, DEMOCRATS USED DEVASTATING FLOODS TO TAKE MORE TAXES FROM IOWANS

The failure of Gov. Chet Culver and legislative Democrats to mesh the state’s tax code with federal disaster relief provisions was “simply a way to take money from people who had already suffered far too much,” Sioux City Republican Bob Vander Plaats said today.

In a story published in today’s edition of the Cedar Rapids Gazette, state Sen. Matt McCoy, D-Des Moines, said his party did not adopt the appropriate federal tax laws because the state would have taken in $56 million less in this fiscal year. Although Democrats refused to consider a GOP proposal to reduce spending by $300 million, McCoy said action to spare Iowans from the higher taxes was “a hit to the budget that, frankly, was not an option.” As a result, many Iowa flood victims who filed their state taxes early will be forced to repay refunds that were based on the federal guidelines.

“Where was Chet Culver when this was happening? Was he simply asleep at the switch again or did he go along with the plan to feed his voracious spending habit?” Vander Plaats asked. “When he signed the state budget into law, he effectively said to thousands of flood victims that he was going to balance the state budget on their backs. It was simply a way to take money from people who had already suffered too much to pay for his bloated government that consistently does less with more.”

He added, “This is the clearest evidence yet that state government doesn’t have a revenue problem; Chet Culver has a spending problem. When Senator McCoy is willing to admit that his party didn’t couple the state tax code with federal disaster relief provisions because it was ‘a hit to the budget’ that tells Iowans that we need leadership that going to look out for them rather than pick their pockets when they’ve been knocked down by a natural disaster.”

Vander Plaats said the episode also demonstrates the need to make our state’s tax structure simpler. “We’re long overdue for tax reform that helps Iowa’s working families and the people who create jobs. We’re never going to get that on Chet Culver’s watch but it will be a priority for my administration,” he said.


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