OTTAWA — Stephen Harper's plan to undo Liberal income tax cuts brought in late last year has raised red flags with some Canadian business leaders who say they want more personal tax reductions, not less.

"In our view, this would be moving in completely the opposite direction to where we think they should be going ... in terms of delivering some tax relief for all of us,'' Canadian Chamber of Commerce president Nancy Hughes Anthony said Monday.

"It sends a bad signal to middle-income Canadians'' -- and to business leaders who have consistently called for personal income tax reductions, she added.

Such concerns, which follow Harper's previous and controversial promise to cut the GST, are raising questions as to whether the country's business sector will continue its traditional support for Conservative political parties.

Hughes Anthony was reacting to weekend comments by Harper, who said a Conservative government would eliminate a reduction of one percentage point in the tax rate of low-income earners -- cutting the threshold to 15 per cent from 16 per cent _ introduced last November by Paul Martin's minority Liberals for the 2005 tax year.

Harper also said he would undo a Liberal promise to increase by $500 the basic personal amount Canadians can claim before taxes kick in -- currently $8,148.

He did acknowledge his rollbacks would have to wait a year, since the Liberal cuts became law in late 2005 and the latest tax forms have been issued based on those measures.

They were part of a Liberal mini-budget unveiled in early November by Finance Minister Ralph Goodale that included about $30 billion in personal and business tax cuts, mostly spread out over five years.

Instead, the Tories have their own tax-cut plan, which would ultimately slash much deeper than what the Liberals have done, Conservative finance critic Monte Solberg said in an interview Monday.

Not all the details have been released, but the core of the Conservative tax plan involves cutting the seven per cent GST by one percentage point immediately, with a second similar cut five years later.

That will more fairly distribute tax reductions, compared with the Liberal measures that focused on lower-income earners, said Solberg.

"It will be a tax break that goes to all Canadians,'' he said.

It's also far more costly: the initial reduction in the GST will cost the federal Treasury $25.5 billion over its first five years alone, according to Conservative party statistics.

Many analysts have criticized the GST cut, saying it actually favours wealthier Canadians who spend more than moderate income earners while doing little to make the economy more productive.

The Conservatives may need to roll back the Liberal personal tax cuts because their GST pledge is so costly, said Hughes Anthony, who will release Tuesday a report card on campaign promises by the major parties in areas ranging from energy and environment to education and foreign policy.

The Tory plans are "bitter-sweet'' for many small business owners who want both income tax and GST reductions, said Garth Whyte, vice-president of the Canadian Federation of Independent Business.

"On the bitter side, the number one tax cut for our members is personal income taxes,'' said Whyte. "But on the sweet side, they (Conservatives) hit every one of our members' corporate income tax priorities.''

Both the Liberals and Conservatives had made other pledges welcomed by small business owners.

Harper has promised to cut the federal tax on small businesses to 11 per cent from the current 12 per cent over five years.

He'd also boost the threshold for the small-business tax rate on earnings to $400,000 from the current $300,000. Small firms now pay 12 per cent business tax until their profits reach $300,000, at which point the tax jumps dramatically to the corporate rate of 21 per cent.

Besides income tax cuts, the Liberals say they plan to raise the lifetime capital gains tax exemption by 50 per cent, to $750,000 from $500,000, to help smaller businesses.