Its not only a prospective tax increase because they wont be able to use it any more, but its a retroactive tax increase because they will have to take in their LIFO reserve and LIFO reserves are really an accounting entry. Theres no cash there, NAM tax expert Dorothy Coleman said.
Although not yet a concern, the billions of dollars being pumped into the economy may beget inflationary concerns in the future. If so, liquor lobbyists also plan to warn lawmakers that repealing LIFO while the Department of Treasury floods the economy with cash may have a disastrous effect on recovery efforts.
We might be facing significant inflation, Coleman said. That combined with repeal would be devastating.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.