Tax rule repeal 'will hit US Oil'

Opponents: Senate minority leader Mitch McConnell talks to reporters today about balancing the budget, with fellow Republican Senator Orrin Hatch at left

AP/SCANPIX

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By News Wires

 29 June 2011 17:35 GMT

Oil and gas companies in the US would be among the hardest hit if Congress repeals an inventory accounting method that, for decades, has helped firms show slimmer profits and pay lower taxes.

As contentious negotiations over how to raise the federal government's $14.29 trillion debt ceiling continue, Republican lawmakers this week sharply criticized the White House for wanting to repeal the "last-in, first-out," or LIFO, accounting method in order to raise revenue.

The Joint Committee on Taxation, a non-partisan Congressional research office, has estimated that repealing the method would generate new revenue of nearly $70 billion over 10 years, but the GOP charged that such a move could cripple struggling manufacturers.

Senate minority leader Mitch McConnell, a Kentucky Republican, criticized the idea on the Senate…

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