LIFO: A massive tax package introduced by House Ways and Means Committee Chairman Charles Rangel (D-NY) includes repeal of LIFO. The LIFO provision calls for full repeal phased-in over eight years. Revenue generated from repeal will be used to offset a reduction in the corporate income tax rate of about 4.5%. Referred to as the “mother of all tax reforms” by Chairman Rangel, his bill also includes other significant corporate tax changes and individual income tax rate changes. ASA and other members of the Tax Relief Coalition sent a letter to all Members of the House and Senate outlining our strong objections to specific provisions in Rangel’s proposal. The letter is available at http://www.asa.net/docs/GA/LtrToCongresss-RangelBill.pdf. Although the Chairman’s tax bill is not expected to move this year, the stage is set for action next year.
Three-percent Withholding: A House-passed bill contains a provision delaying until 2011 the start date on the 3 percent withholding on government contracts. The legislation (HR 30560) contains language extending the starting date from 2010 to 2011. The measure is now pending in the Senate where passage seems unlikely. While this 1-year delay is a positive step, ASA and others in the Tax Withholding Coalition will continue working for full repeal. The Coalition also sent a letter to all 50 governors to inform them of the 3% withholding requirements and to request their assistance in repealing the withholding requirement. A copy of the letter to the governors is at www.asa.net/docs/GA/3%25LtrtoStates.doc