How does a lower tax rate affect net income and the net deferred tax liability on the balance sheet as discussed in the Income Taxes chapter?

A lower tax rate increases net income on the income statement and improves the net deferred tax liability on the balance sheet, making it smaller.

When a company experiences a lower tax rate, it results in higher net income because the tax expense decreases. Additionally, if the company has a net deferred tax liability, this liability position improves as it becomes smaller, reflecting the reduced future tax obligations.