Stephanie Salmon, AFS Washington Office; Jeff Hannapel & Christian Richter, The Policy Group, Washington, D.C. WASHINGTON ALERT Industry Opposing LIFO Repeal
AFS JOINED MORE THAN 125 OTHERS IN A LETTER OPPOSING TAX REFORM THAT WOULD ELIMINATE THE "LAST IN, FIRST OUT" INVENTORY ACCOUNTING METHOD.
More than 125 associations and com-
panies, including the American Foundry Society, signed a coalition letter to House Ways & Means Chairman Dave Camp (R-Mich.), opposing the repeal of the "Last In, First Out (LIFO)" accounting method contained in his tax reform pro- posal, which he released in February. A number of metalcasting facilities utilize LIFO and would be seriously impacted if repeal was enacted. It appears that that some lawmak-
ers saw LIFO as “outdated” and “less necessary” and assumed LIFO users would not object to or strongly oppose a prospective repeal, believing the cen- tral debate would be on how to impose a recapture tax.
In the letter to Congress, industry
proponents claim LIFO is an appro- priate means of evaluating inventory
ON THE HILL
OSHA Regional Emphasis Program Targets Auto Supply Manufacturers
OSHA recently announced a Regional Emphasis Program (REP) that will focus enforcement resources on employers operating in the automotive supply manu- facturing industry. This new Auto Supply Manufacturers enforcement program will target manufacturers in the Southeast that supply engines, airbags, trim, or any other automotive products. The specific geographic area covered by the inspection program is expected to include at least Georgia, Mississippi and Alabama and will affect metalcasting facilities in these states. As a result of the REP, most automo- tive supply manufactures located in the Southeast can expect a comprehensive, wall-to-wall OSHA inspection within the next two years. OSHA Area Offices have started to issue letters notifying automotive supply manufacturers about the targeted inspections, as well as common causes of occupational injuries in the auto suppli- ers industry—machine guarding, lockout/ tagout and electrical hazards. A copy of the Auto Parts Industry Emphasis Program directive is found at this link: https://www.
osha.gov/dep/leps/RegionIV/CPL_02-03.pdf.
China to Appeal WTO Rare Earth Ruling On April 17, China said it would appeal
a World Trade Organization (WTO) ruling that found it had violated global trade rules regarding its export limits on rare earth minerals used in defense and technology products. China lost the WTO dispute in March, handing Europe and the U.S. a victory over what they see as China's unfair trade practices.
China produces more than 90% of the world's rare earths and imposed strict rare earth export quotas in 2010, saying it was trying to curtail pollution and preserve re- sources. Prices of the prized commodities soared by hundreds of percent after China imposed its export quotas, and the U.S., European Union and Japan complained the restrictions gave Chinese companies an unfair competitive edge.
Metalcasters producing ductile iron castings rely on the following four rare earth elements: lanthanum, cerium, praseo- dymium and neodymium. In recent years, the export restrictions has caused U.S. met- alcasting facilities and other manufacturers
to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths.
Senate Finance Committee Approves Tax Extenders Package
In early April, the Senate Finance Committee passed a tax extenders pack- age, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act. The measure retroactively would extend through 2015 a package of more than 50 temporary tax provisions that expired at the end of 2013. The measure includes important incentives for many metalcast- ing businesses, such as the research and development (R&D) tax credit, Sec. 179 expensing and bonus depreciation. The reinstatement of Section 179 expensing at previous levels is important. It allows metalcasters to expense investments made in new technology, equipment and infrastructure in their operations. No date has been set when the bill will be consid- ered on the Senate floor.
For additional information, contact Stephanie Salmon, AFS Washington Off ice,
202-842-4864,
ssalmon@afsinc.org. May 2014 MODERN CASTING | 17
and its repeal would significantly and permanently harm many businesses, including metalcasting facilities. According to AFS, LIFO repeal’s damaging effects arise not just from the punitive retroactive recapture tax, but also the prospective loss of the account- ing method which most accurately and fairly states business income for busi- nesses with ever-rising costs of replacing
inventory. AFS argues recapturing up to 70 years of income in search of additional revenue to fund other tax priorities is unfair and unjustified under the rationale put forth in the discussion draft. Tis issue and other tax-related mat-
ters will be addressed by members of metalcasting industry at the June AFS Government Affairs Conference and Lobby Day.
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