U.S. Senators Tell Treasury To Leave LIFO Alone
Last week a bipartisan group of 16 senators sent a letter to U.S. Treasury Secretary Jack Lew opposing repeal of LIFO, or last-in, first-out, as part of comprehensive tax reform. (As a reminder, tax reform discussion documents released earlier this year by both the House Ways and Means Committee and the Senate Finance Committee suggested repealing LIFO.)
In their letter the senators argued LIFO is a 70-year-old, widely-used accounting principle, not a tax matter, and that repeal would make U.S. businesses less competitive globally and reduce job creation. The senators said they are particularly concerned about a retroactive repeal of LIFO because it would put an “undue burden” on companies and require them to go back decades and “pay off the ‘reserve’ to which they’ve been entitled.” Indeed, the senators said, a retroactive appeal could put “companies out of business altogether.”
The 16 senators who signed the letter are: John Barrasso (R-Wy.), Mark Begich (D-Alaska), Roy Blunt (R-Mo.), Joe Donnelly (D-Ind.), Mike Enzi (R-Wy.), Kay Hagan (D-N.C.), Heidi Heitkamp (D-N.D.), James Inhofe (R-Okla.) Amy Klobuchar (D-Minn.), Mike Johanns (R-Neb.), Jerry Moran (R-Kan.), Rand Paul (R-Ky.), Pat Roberts (R-Kan.) and David Vitter (R-La.).
MSCI agrees with the senators’ arguments and, as a member of the LIFO Coalition, will oppose LIFO repeal if it comes up again in the 114th Congress as part of comprehensive tax reform.