New Taxes to Cost the U.S. 150,000 Jobs

The call for new taxes on the domestic oil and gas industry is growing louder and louder on Capitol Hill. However, many of these proposals are job killing tax increases that place US companies at a competitive disadvantage to foreign owned companies like BP, undermine US economic recovery, and worst of all, further punish families, communities, and workers in the Gulf region who have safely and responsibly provided America the energy we need to thrive for decades.

Louisiana State University Endowed Chair of Banking and nationally-renowned economist Dr. Joseph R. Mason estimates that President Obama’s proposed energy tax changes would trigger grave economic consequences. In the newly released “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers,” Dr. Mason finds the resulting fallout over the next ten years would include initial losses of over 154,000 jobs by the end of 2011, not only in the energy sector but across the whole economy; more than $341 billion in lost U.S. economic output; and in excess of $68 billion in lost wages nationwide.

Decrease in Output Resulting from Repealing the Section 199 and Dual Capacity Tax Credits, by State, 2011-2020 ($ Millions)

The energy industry is absolutely critical to our nation’s economic health, both because of the affordable energy resources it provides and the jobs and revenues it produces. To single out any one industry for punitive tax treatment is wrong. To single out the American energy industry – creating a tax scheme that makes it harder, not easier for us to compete with foreign and state-run companies – should be completely out of the question.