• With: Tracy Byrnes, Wayne Rogers, Christian Dorsey, John Layfield, Jonathan Hoenig

    DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

    POSSIBLE GOVERNMENT SHUTDOWN: SHOULD WE CUT SPENDING FOR SOME THINGS IN ORDER TO INCREASE SPENDING ON OTHERS?

    TRACY BYRNES: Look, we have the highest, federal corporate tax rate out there right now, and we tax on worldwide income, let's not forget that. So, the United States makes it so prohibitive for us to be globally competitive. You free up some tax dollars, they can get out there and hire more people, but right now, they have to set aside money to pay Uncle Sam every year. Oil companies in particular, even though everyone likes to demonize them, their effective tax rate is well close to 40 percent.

    WAYNE ROGERS: Well, I don't think it's as simples as just lowering corporate tax rates, I mean we've got so many exceptions to the tax code right now. Meaning someone gets a tax exemption for this, somebody gets a tax abatement for that. If you're going to get rid of all of those and you can lower the rate, that's fine. Or, you should have two rates; one that says, hey we're going to lower the rate for everybody who doesn't get one of these exceptions. If you're getting an exception, like you're getting a depletion allowance or you're getting this oil and gas or whatever it is, you're going to pay a different rate for the guy who isn't getting anything.

    CHRISTIAN DORSEY: Well jobs would, but the solution is not by lowering the corporate tax rate. You know, it's meaningless to talk about the corporate tax rate in terms of the advertised rates that we're putting up on screen. As Wayne said, through deductions and creative accounting, corporations pay far less and when you look at all of those adjustments, we see that the United States corporate tax rate is about the same rate you see for other large economies, but as a share of our economy's ours is so much larger. The corporate tax burden is the lowest in the world. You're showing the advertised, top-marginal tax rate, which is not the rate that anybody pays. So, to use that statistic is misleading. If you actually look at what corporations actually pay as a share of the economy, the United States corporate burden is the lowest in the world. Furthermore though, this is a meaningless conversation though because the reason people don't add jobs is not because of taxes, it's because of weak consumer demand. If people are going to buy their goods and services, they'll add jobs. It's as simple as that.

    JOHN LAYFIELD: I will stand by another statement and tell you exactly what small businesses pay right here in New York. I'm talking exactly. This is not just something that you put up on a screen and say, hey this is our corporate tax rate. They pay around 50 percent of taxes because they're LLC's. So you have the city tax, the state tax, and the corporate tax. Businesses in New York City and are an LLC are paying 50 percent plus. Now you tell me that's not the highest in the world? I will tell you that you are wrong. We've got to do something about this. You're talking about loopholes, you're talking about corporate tax, but broadening the base is the dumbest argument I've ever heard. What are you going to do? Tax these people at 70 percent? We've got to do something to scrap this entire system and start over.

    JONATHAN HOENIG: Well of course Cheryl, taxes are a direct and obvious cost and companies are hurt by higher taxes. Who are companies? I know the President and people on the left want you to think that companies are this other thing, but of course they are individuals. They are owned by individuals, and to coin maybe a new phrase; what's good for companies is good for American individuals, the American economy. That's where we get the growth. I know many on the left think that we need more government spending on Solyndra, etc., but we need private industry and private innovation. That happens with lower taxes and lower regulation.

    SOLYNDRA SCANDAL: PROOF ONLY THE PRIVATE SECTOR SHOULD INVEST IN U.S. COMPANIES?

    JONATHAN HOENIG: Well Cheryl, free market means free from government and our own market, our own government is far from free now. We used to talk about IBO's, new companies, new innovations. Now, open up the business section of any major newspaper. It's full of stories about stimulus, bailouts, intervention. I mean this new effort from the Fed, it's like, if you love QE1 and QE2, you're going to love operation twist. The market hasn't liked it; the economy hasn't liked it, but yet we're on tap for more of the same.

    WAYNE ROGERS: Well I think it's funny because these guys are like vultures. They don't care whether the market, who's stimulating, not stimulating. They're traders betting on the moment. They're not long term investors. Long term on Wall Street is, you know, while I get a cup of coffee. It doesn't have that kind of a meaning down there. If they're whining, they're whining because they're selfish. That's all.

    CHRISTIAN DORSEY: Oh only if it were true. I know Jonathan wants to return to the Housian days of tech bubbles and housing bubbles. That was terrible and what we have now is even worse. And what we've got now is a situation where the Wall Street sector wants to completely privatize profits and socialize all loses. It's a ridiculous perversion of the way our economy should be working where, if you make money, nobody should have any say in what you do with that money, but if you lose money, then we should all collectively come to your assistance to make sure that you can keep going. I'm absolutely disgusted that we've come to the point where politicians in Washington are abetting this perverse notion of how our economy is supposed to work.

    JOHN LAYFIELD: No look Christian, you're a smart guy. Guys in Washington D.C. are idiots. I mean that very sincerely Christian. I think the world of you and of your viewpoints and the way you articulate them. The guys in D.C. are morons and because they can't get along we are most likely going to have a government shutdown, because Boehner doesn't like Obama, and Obama doesn't like Boehner. That is going to kill the market, and the other part is you have Chancellor Merkel over in Germany now whose political base is eroding. That kills the U.S. market because that kills her ability to bail out Greece, which is this contagion effect we're so worried about. So it's all about capricious politicians. That's the worst thing in the world to bet on. We've got to get them out the way.

    TRACY BYRNES: I think it began with President Clinton demanding everyone own their own home. I mean, we can go back to the government getting involved where they should not be and that's where they are right now and they're in this market and they shouldn't be, and I don't think the markets whining at this point it's utterly disappointed that there is no leadership; there's no certainty anywhere. No one can plan tomorrow and Wayne's right, by the time you come back from your cup of coffee, there's a new rule or regulation installed that prohibits your business from growing.

    U.S. BUSINESSES URGE CONGRESS TO LOWER CORPORATE TAX RATES: WILL LOWERING TAXES ON U.S. COMPANIES HELP LOWER THE UNEMPLOYMENT RATE IN AMERICA?

    JONATHAN HOENIG: Yeah of course Cheryl, Solyndra like all the green energy was based on government subsidy; the intervention, the mandates, the photo-ops with the President. It was all politically based, not economically based as it would be in the private sector, but you know reality can't be evaded forever. Reality catches up, just as it did with ethanol. Once the subsidies go away; once the government goes away, the enterprise crashes. That's exactly what happened with Solyndra.

    WAYNE ROGERS: Well it's a terrible thing. It's got to be in the budget. If it's not in the budget and you can't budget for these items, you shouldn't spend for them. It's as simples as that. If you don't have the ways to pay for them, you shouldn't spend for them. Now, there are things that the federal government does do well. We sponsor the space program; we run the military. There are some things, but those are all in the budget. This was never in the budget. None of these things were in the budget and they shouldn't be done. For your information because you should be reading, private companies like Boeing like that have military contracts, who are under the government and they work. They're some that don't. You cannot stop a crook from stealing if somebody's going to steal, they're going to steal, whether it's government or private my friend and you should know that.

    CHRISTIAN DORSEY: Well listen in Solyndra it's an unabashed failure. There's no one who's going to argue that more strenuously than me, but why in the world are we not talking about the rescue of the auto industry; GM and Chrysler, where we paid far less than we ever thought we would. We've been able to keep these companies afloat. They're actually adding jobs to the economy and creating new factories. We have not lost money on that Jonathan, if you want to take a look at the facts you can see it.

    TRACY BYRNES: I just think the bigger story is the lack of due-diligence on this. You have Price Waterhouse Cooper coming out early saying this company is a concern. That means they're not sure it can keep going. Two months before the President actually put money into it, you had refinancing gone bad for this company. They stopped the IPO; I mean the writing was on the wall. This was a bad investment and then of course the bankruptcy. Where was everyone during this?

    JOHN LAYFIELD: This at best was inept, at worst it's criminal. When you're talking about our leaders as one of those two choices, those are two bad choices, but this doesn't take away from the fact that you're going to need government to build a natural gas society; you're going to need government to do something out there. Solarcity is a perfect example of how government private/public enterprise can work and not cost the taxpayer one dime.

    WHAT DO I NEED TO KNOW?

    WAYNE ROGERS: I think if you're going to have a continuation of the slowdown, there's one way to protect yourself. EUO, which is a short of the Euro and that's an ETF that you can be fairly safe in I think.

    JOHN LAYFIELD: A huge natural gas find in Shell in northwest England is going to be huge for the UK. Natural gas is going to be a great bridge to our future. Frac Tech is coming out with an IPO, but until that future comes, play the old fossil fuel companies like Chevron.

    JONATHAN HOENIG: Well last week Cheryl, the Fed unveiled its operation Twist strategy, and I'm sure that's going to set the economy on a positive note; anyway, it's buying long term bonds. I'm going to take the other side of that trade with TBF. It's a fund that I own that will actually rise if long term interest rates rise. It's essentially betting against Bernanke. It's been a loser so far, but I own the stock and think it could go higher from here.

    TRACY BYRNES: I think long term investors are really nervous right now, Cheryl, and unfortunately I think they have a right to be. Between now and the election it's going to be more of the same political posturing that unfortunately could very well move this market around.