Last-in, first-out (LIFO) is an important and time-honored accounting method used by small businesses. But, as recently reported in this New York Times article, the White House has continually pushed hard for LIFO repeal both as part of the President's proposed budget and in debt ceiling negotiations. SBE Council is a member of the LIFO Coalition, and we are working hard to ensure that repeal does not happen.
(Reasons Why LIFO Should Not Be Repealed)
In an urgent appeal to President Obama, Vice President Biden, Treasury Secretary Geithner and all Members of the United States Congress, the LIFO Coalition highlighted the key reasons why LIFO should not be repealed in advertisements in The Hill and Politico. Repealing LIFO will:
Place a massive, unprecedented retroactive tax hike on job creators.
Increase costs for businesses that will result in less growth, job losses and reduced employee benefits.
Force companies to pay taxes on unrecognized “phantom profits” caused by inflation.
As SBE Council member and tax advisor Leonard Steinberg told reporter Angus Loten in a July 13 Wall Street Journal piece (“Small Firms Defend LIFO”) the new costs and burdens for small businesses would be harsh: “Carrying inventory would become more expensive. How do you not pass that along to your customers?”
SBE Council will continue to fight against repeal. It is fundamentally unfair to retroactively penalize small business owners (who followed existing and long-standing tax law) to bail out the excessive spending habits of politicians in Washington.
Karen Kerrigan, President & CEO