Inflation is coming, and your company accounts for its inventory under the Last In First Out (LIFO) method. Lets say prices double between 2012 and 2013, and you sell the same number of units in both years, 1 million thingies. You get $10 per thingie in 2012 and $20 in 2013, and buy them at wholesale for $8 in 2012 and $18 the next year. You keep a large inventory, more thingies than you sell in a year.
Under LIFO, your 2013 profit is $2 million, or ($20-18) x 1 million units. Current costs are matched against current sales prices.
According to this morning’s New York Times, Blatant Umama wants to eliminate LIFO. Under the most widely used alternative method, First in First Out (FIFO), old costs get matched against current sales prices, and your 2013 profit would be recorded as $12 million, or ($20-8) x 1 million units.
The taxes on this miscalculation would put you out of business.
Blatant, the Times tells us, says LIFO is arcane. That is a flat out lie. LIFO is the only way my profession can produce books that make sense out of what he and his ilk are doing to this politically ravaged nation.
The man is proposing the destruction of gamed market Capitalism itself. Hey, it's gamed, but it's the only Capitalism we've got. The MacDougal Post calls for his immediate impeachment.
Go over the numbers again. There isn’t a minute to lose.
