Word: lifo
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Dates: during 1950-1959
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...many a U.S. corporation, LIFO is a magic formula in times of inflation. It cuts their profits for tax purposes without taking a penny out of their coffers. Under LIFO-pronounced lie-fo and standing for "last in, first out"-the Government permits inventory to be figured by the cost of the last stock bought during the year, on the theory that it is the first to be sold. Thus the profit on an item costing $2 in January and $3 in December is figured on the basis of the higher cost, thus a lower tax. Though designed...
...during inflation, when costs are steadily rising, many stores prefer it because it guards them against higher taxes should inventory costs begin to fall. Companies cannot switch back and forth; Government permission is needed to do so. Gambling on continued price rises, Macy's asked permission to use LIFO in 1942. The Government refused, but in 1947 allowed a Baltimore department store, Hutzler Brothers, to file under LIFO after the store won its case in federal tax court. Soon after, Macy's began paying taxes under LIFO, won the Government...
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