Louisiana State UniversityEndowed Chair of Banking and nationally-renowned economist Dr.Joseph R. Masontoday released a just-completed study that finds the Administration's proposal to carve out U.S. energy firms from receiving certain tax deductions would have a net negative impact on federal revenues. In his study, "Budget Impasse Hinges on Confusion among Deficit Reduction, Tax Increase and Tax Reform: An Economic Analysis of Dual Capacity and Section 199 Proposals for the U.S. Oil and Gas Industry," Dr. Mason finds repealing tax deductions for American energy manufacturers would result in:

• $30 billionin Federal tax revenue at the expense of some$341 billionin economic output;
• Over 155,000 lost jobs,$68 billionin lost wages, and$83.5 billionin reduced tax revenues; and,
• A net fiscal loss of$53.5 billionin tax revenues.

"The administration's proposal to eliminate tax deductions on U.S. oil and gas companies is grossly counterproductive toward the goal of increasing federal revenues,"Dr. Mason said."Such a move would have a net negative impact on revenue, thereby increasing federal deficits.

"If the goal is deficit reduction, a far more meaningful approach wouldbe reforming federal tax and business policies that encourage economicgrowth. Expansion of oil and gas exploration and production on the OuterContinental Shelf, for example, would generate an estimated$11billionannually in Federal tax revenue in the short run, and$55billionannually in Federal tax revenue in the long run.

"Reform supports business development in both developing and developedcountries, alike. The best reformers have several things in common.First, their reforms are part of a broad agenda of boosting globalcompetitiveness and, second, they never stop. Even developing countriespreviously stung by fiscal imbalances and committed to business reformrarely retreat to increased taxes as a way to raise revenues. The U.S.should also step up to the challenge of reform."

Dr. Mason's conservative economic analysis employs the same government modeling – the U.S. Commerce Department's RIMS II system.

Thomas Pyle, president of the American Energy Alliance, issued the following statement in response to the study's findings:

"This study confirms that President Obama's insistence on imposing discriminatory tax changes on American oil and gas companies has nothing to do with deficit reduction – it has everything to do with satisfying his anti-energy agenda. The president's insistence on these senseless tax hikes is further proof of his outright hostility to the oil and gas industry - an industry that provides over 9 million jobs and billions in revenue to the federal government."