With all the federal backing that the industry has, I predict one of two scenarios:
1 the bill simply dies.
2 amendments are made to exclude industries that require year so to make their product.
I don't see this passing.
This, is striking too close to home and below the belt.
I doubt this will ever include the whiskey industry just because of the aging issue, but if it ever gets traction it will cause a lot of people, including moi, to become more active....writing Congressmen and Senators, etc.
I'm sure most of them enjoy a bourbon every now and then. After all, bourbon is as American as apple pie, 4th of July, etc.
"Civilization begins with distillation."
And my new takeaway for the day is that there's an actual Congressional Bourbon Caucus that will be celebrating its third birthday in a few months!
"Delicious... bourbon. Brownest of the brown liquors... so tempting. What's that? You want me to drink you?" -Lionel Hutz
At the end it mentioned that Beam is sitting out of the fight, since they do not use this type of accounting.
So did have they done the math and figured something out that the others do not know. Or, if it seems to be dis-advantagous, then why are they using it?
"Life is life and fun is fun, but it's all so quiet when the goldfish die."
Without going into an all-out rant here in the wrong subject thread...to sum it up, Americans are learning the hard, hard way that elections have dire & long-term consequences. The current administration just continues to double and triple-down on making sure it squeezes as much tax out of everyone (the minority who pays taxes anyhow) using every trick known in heaven, hell & earth - and creating new ones daily - in order to extend it's tentacles to achieve the ultimate goal....total tyrannical centralized government control.
Enough said...for here and for now.
"Sic Semper Tyrannis"
Heck, look at what Chris Dodd said. He practically blew the lid of corruption.
Anyways....back to your regularly scheduled bourbon...
This proposal isn't new and all it relates to is the method of accounting for inventory that companies use for tax purposes. What is proposed is the elimination of the LIFO (Last In First Out) method of accounting for inventory. When this method is used, it is assumed that the cost of the last item of inventory purchased is the cost of what was sold, regardless of the fact that this probably wasn't the case. What this does is it allocates more costs to the inventory that is sold, essentially reducing profits, and thereby reducing the tax bill. IIRC the use of LIFO took off during the early 1980s when inflation rates were much higher in the US.
Eliminating LIFO would require taxpayers to use FIFO (First In First Out) whereby the older (lower) costs of inventory are assigned to what is sold, increasing profit and increasing taxes. The boost to tax revenue will be temporary as the old prices in inventory are used up, and eventually, taxes will even out once that happens.
There has been talk of making this change for years, now. Brown-Forman isn't going to be taken over by some foreign corporation becuase of higher tax bills. And Beam apparently never made the switch because they probably didn't think it was worth it for tax purposes and probably uses FIFO which likely better reflects reality.
Never ask a man if he is from Virginia. If he is, he'll tell you. If he isn't, you don't want to embarass him.
Thanks to strategies like this, corporations like Google paid effectively 3% tax in 2010, JP Morgan 3.5% and so on.
So, which loophole is important to which corporation varies, but thanks to so many of rhem being there, you can be certain that they are all paying an effective rate far less than it appears they are paying on the surface.