Fannie Mae (FNMA)

[contrarian bull]

I did not agree with Contrarian as the tax rate was imposed at 30 and 15 on a cost element and not on profit

Every dollar of tax deductible expense shows up dollar-for-dollar as decreased taxable profit.

If my profit would be $100k - and I hire a new guy for $20k per year then my profit is $80k. Taxes take 30% leaving me $56k after tax profit.

If that new guy brings in $100k of new business and my profit is 15% on average then that brings my taxable profit back up to $95k and I keep $66.5k

Run that same scenario at a 15% tax rate - and before hiring that guy my after tax profit is $85k. After hiring that guy my after tax profit is $80.75k.

At the lower tax rate - hiring that additional employee and bringing in an additional $15k of profit reduced my after tax profit from $85k to $80.75k. I lost $4250 by hiring 1 more person.

Yes - the lower tax rate gives me more cash in my pocket even if I hire that new guy - but I do not run a charity. A businessman would not hire an additional employee if it reduced his profit. A corporate CEO has a legal obligation to protect the owners and shareholders of the company if it is publicly traded.

So - lower taxes = fewer jobs, but more profits for owners of companies, and more spending by those owners which is not all bad!

I'm for tax cuts - but you won't see tax cuts bring in more jobs in the long run.