No Joy in Fristville

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The much-maligned $100 tax rebate-for-high-gas-prices is dead.

Senator Bill Frist of Tennessee, the majority leader, said he had decided to jettison the provision, which would have generated billions of dollars by changing the way businesses treat inventories for tax purposes. Instead, he said the Senate Finance Committee would hold hearings on the plan "later this year, so the pluses and minuses of the provision can become well known."

"We'll hold hearings" is the Dirksen Building equivilent of "This was fun; I'll call you sometime."

NEXT: Nightmare At the Fall Classic, or, Jose, Don't Be Discouraged (from the annals of Hit & Run)

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  1. The whole idea was stupid. I’m glad they’re rid of it.

    JMJ

  2. “The whole idea was stupid.”

    Totally true, I was still going to take back my $100 if they sent it to me.

  3. Leave it to the NYT to characterize the rape of industries for constituent hush-money as “generating” money.

  4. Someone explain the “Dirksen Building” reference to me (rather hear it here than Google).

  5. The NYT article is hopelessly unclear on this, but other media reports are suggesting that the $100 rebate is not dead, just the proposal to require that oil companies abandon LIFO accounting (which raises accounting costs and thereby lowers accounting profits and in turn increases income tax liability).

    See, e.g., the AP.

    As for the rebate itself, we’ve seen before what will happen if the checks are actually issued: people will jump into their SUVs, drive to the nearest Wal-Mart and buy $100 of Chinese-made goods.

    Somehow I doubt that’s what the politicians had in mind. Go figure.

  6. Personally, I think LIFO is a b.s. accounting method. FIFO should be the standard across the board. However, if it’s leagal for one company, it should be legal for all, no exceptions.

  7. Leave it to the NYT to characterize the rape of industries for constituent hush-money as “generating” money.

    Yeah, you know, what makes me stay awake at night is the thought of CEO’s of oil companies and major stockholders, snorting their cocaine and fucking hookers all night worried that a new tax may cut into their awesome profits… Geez, economic libertarianism can make suckers out of a lot of folks…Those poor “industries” being raped…

  8. Personally, I think LIFO is a b.s. accounting method … However, if it’s legal for one company, it should be legal for all

    You could make the case that there are industries where LIFO more correctly represents the value of inventory, which is the right standard to apply. None springs to mind, but I’m sure they exist.

    As long as it can be shown to best value inventory in a particular situation, I see no problem with it. If it’s just used as a dodge, I say death penalty.

    Lower of cost or market, or die.

  9. Without looking at industry particulars, LIFO gives more realistic P&L as the inventory expensed is closer to current prices, but worse Bal Sheet as the inventory remaining is at a cost far from the current prices. FIFO is the opposite. Not that simple to say which is ‘better’ without considering the purpose or objective.

  10. Ironchef:

    The Dirksen building is one of the office buildings in D.C. that houses the Senate. It was named after a former Senate Minority Leader.

  11. It’s nice to see the lemmings stop to think before jumping off the cliff.

    I couldn’t figure out where the $100 would come from. If it’s from that magical money tree in DC, why not make it $1,000? Or $10,000?

  12. “Not that simple to say which is ‘better’ without considering the purpose or objective.”

    The objective, obviously, is to screw the shareholders.

  13. Not sure how you get to “screw the shareholders”. It keeps current income lower than it might otherwise be, which means less tax due.

  14. I refer in general to the phenomenon of executives and directors conspiring to transfer wealth from the owner of the corporation (me) to the employees of the corporation (them).

    If “Neutron Jack” Welch wants entrepreneurial returns from his efforts, let him start his own business from scratch, like his pal Bill Gates.

  15. If you wanted to make a point about execs paid out of proportion with value delivered to s/holders, Jack Welch is the last place you wanna start

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