DOT Official Proposes Funding Highways through LIFO Repeal

Department of Transportation Undersecretary for Policy Peter Rogoff reportedly stated recently that the Obama Administration wants to fund the shortfall in the President’s $302 billion, 4-year highway and transit program by eliminating the “last-in, first out, or LIFO” accounting method used by many businesses, including many GAWDA members, and changes to tax rules on foreign earnings brought back to the United States. The proposal would include $152 billion in traditional revenue into the Highway Trust Fund via gasoline and diesel fuel taxes and other excise taxes, as well as $150 billion from corporate tax reform, including LIFO repeal. Repealing LIFO would generate additional tax revenue because companies would have additional taxable profits if they were required to assign the lower cost, earliest-acquired inventory to all sales.

The Congressional Budget Office has determined that the Highway Trust Fund requires an additional $15 billion per year at current tax rates to continue spending at current levels. The existing highway program authorization expires on September 30, 2014; Congress must act before then to continue spending on highways, bridges and transit.

The National Association of Wholesaler-Distributors is leading a coalition of 125 trade associations, including GAWDA, opposed to repeal of LIFO accounting.

Gases and Welding Distributors Association