Federal deductibility tough for economic development Posted By: Ben Butler May 6, 2009 @ 5:44 am Today's Local News Tweet Share Email Economic development officials say Iowa sometimes gets a bad wrap because they say taxes look higher than they are. Ed Raber, with the Washington Economic Development Group, says since businesses and individuals can claim federal taxes as a state deduction, it often makes Iowa's tax rate look high, and might scare away potential businesses.