More Business Taxes on the Horizon

Governments are like companies.  They are always looking for a way to grow their revenue stream (and under the guise of offering more services).

While many are aware of issues relating to payroll taxes, capital gains taxes, income taxes and more, the NAW is again enlisting the help of businesses to stop the federal government from essentially changing the taxes on business inventories.  The issue is called LIFO and it is an accounting process that values inventory (LIFO = last in, first out).  This affects companies’ taxes … and the more companies have to pay in taxes, the less profits they have to invest into wages, hiring people, buying technology, purchasing more inventory, and in general building their business to provide security to their employees.

So, as a public service announcement, below is a recent message sent by NAW (National Association of Wholesalers).  We encourage all … distribution management and their employees, manufacturer management and their employees and reps (whether you stock or not) to let your elected officials know that another tax on businesses that you work for is not good for you.

From NAW
TO:  Industry Leaders and Partners


FROM:  Jade West, Senior Vice President-Government Relations, National Association of Wholesaler-Distributors


As you know, there is a great deal of discussion today about the “fiscal cliff” the country is facing, with economists, Fed Chairman Ben Bernanke, the Congressional Budget Office, all predicting a fiscal crisis and calling for action to prevent it.


Many Members of Congress are taking the threat seriously, and bi-partisan groups of legislators are meeting to discuss deficit reduction options and tax reform.


Action to address the fiscal crisis is critically needed, but the increased focus on the growing debt has put LIFO at its greatest risk in recent years. The President called for repeal again in his Fiscal Year 2013 Budget, and pushed aggressively for repeal in deficit reduction talks last year.


More worrisome, even LIFO repeal opponents in Congress do not believe that LIFO is safe. Congress will be looking for new revenues to address the debt and LIFO repeal would generate a significant amount of that revenue.


We need to act – now – to convince Members of Congress that LIFO repeal should not be a part of deficit reduction and/or tax reform legislation. If repeal is included in legislation, removing it from that legislation will be extremely difficult – if not impossible.


We have been at this point in the past, starting with the original threat to LIFO in 2006. We have been successful in saving LIFO for the last six years because of the involvement of the business community and the overwhelming business constituent contact with Congress. We can be successful again – if you act.


To save LIFO, businesses which rely on it need to communicate with their Senators and Representative ASAP. Please write to your Representative and Senators – today – to urge them to oppose repeal. If you have written to them in the past, please write again! And your employees are constituents and voters wherever they work, so please write to the Members of Congress from ALL of your locations.


Please provide information about your company, the number of workers – their constituents – you employ, and specifics on how repeal would impact your company and workers. If repeal would force you to lay-off workers, reduce salaries, stop funding health care or retirement programs, postpone a planned investment – let your Representatives know. With unemployment still crippling our economic recovery a tax proposal that threatens jobs is much more likely to be rejected by Congress.


Finally, please point out that LIFO repeal would be an unfair and unprecedented retroactive tax hike – comparable to repealing the mortgage interest deduction and requiring taxpayers to pay back the tax savings they have properly and legally accrued using that deduction. Many Members of Congress are unaware of the retroactivity in LIFO repeal, and oppose repeal when they learn of its retroactivity.


It is best to email or FAX your messages. You can do this easily by using our grassroots “E-ALERT” on-line program.


Go to: http://www.naw.org

Click the “TELL CONGRESS” button in the top right corner of your screen. You will be linked to NAW’s “Take Action” E-Alert Program.


Click on “SAVE LIFO”


Easy to follow instructions, including talking points, will take you through the rest of the very quick process.

Please take action NOW. We will save LIFO only if Members of Congress understand it and the negative impact of its retroactive repeal on jobs and economic growth – and we make repeal too politically toxic for Members of Congress to support.


Go to http://www.naw.org and click “TELL CONGRESS” now.