Study: Proposed Obama Energy Taxes Will Be Devastating
LSU Professor Determines Any Revenues Will Be Offset by Long-Term Damage to Industry
LSU finance professor Joseph Mason will release a study this Tuesday outlining the effects on America’s economy if two proposed taxes on oil and gas industries are enacted. Mason’s study, released in conjunction with the American Energy Alliance, rebuts provisions announced in President Obama’s Monday press conference on the debt ceiling imbroglio.
In his speech Monday, President Obama criticized “egregious loopholes that are benefiting corporate jet owners or oil companies at a time when they’re making billions of dollars of profits.” Professor Mason’s study examines the impact of ending two of these tax breaks for the oil and gas industries.
One exemption is a domestic manufacturing deduction, while the other is designed to help oil companies reduce their American taxes when they pay taxes to foreign oil-producing companies. Both are two of the largest industry tax exemptions which President Obama is targeting.
Whereas the Obama Administration argues that these provisions will raise roughly $29 billion over the next decade, Mason contends that they would in actuality result in net losses of $54 billion over that time period. The study projects a loss of approximately $341 billion in economic output, 155,000 jobs, and $68 billion in wages – catastrophic numbers in any circumstances.
Instead, Mason and the AEA advocate loosening the restrictions on offshore drilling which have been hampering economic recovery and contributing to higher energy prices. Mason and the AEA have been critical of President Obama’s policies, contributing last year on a report which illustrated the crippling effect of proposed industry taxes
The contentious debt ceiling discussion has been marked by a Democratic focus on raising taxes and vilifying the energy companies as an ostensible solution to the impasse. Mr. Mason’s study demonstrates that raising taxes on oil and gas could actually worsen the problem.
Jamison Beuerman is a contributing writer and policy analyst at the Pelican Institute for Public Policy. He can be contact via email at email@example.com or followed on twitter @jbeuerman.