By Alan Murray and Geoffrey Smith
November 3, 2017

Good morning.

Big business scored a big win in the Republican tax bill released yesterday. Fortune’s Shawn Tully does the best job breaking down what it means for large companies here, but the bottom line is the bill cuts the top rate to 20%, creates a territorial tax system, accelerates the write-off for capital investment, and allows for repatriation of overseas profits at low rates.

There are some offsets, but not as bad as business groups feared. Interest deductions are capped at 30% of earnings, but not eliminated; and the plan includes a minimum tax on profits earned in overseas tax shelter countries, but not as onerous as feared. The Business Roundtable and the Chamber of Commerce both endorsed the plan.

The plan is based on the assumption that a better corporate tax system plus repatriated earnings will lead to more investment and jobs in the U.S. Past experience, however, suggests there’s a danger much of the money will get shoveled into corporate share buybacks and dividends, which would boost the stock market (and CEO bonuses) but do little to create jobs or help disaffected workers. The plan could have done more to nudge companies to address pressing workplace needs—for instance, by creating the tax credit for training that Isabell Sawhill proposes here.

Passage of the plan is still far from a done deal. Its limits on state and local deductions threaten a revolt from Republicans in high tax states, home builder groups remain opposed, and the National Federation of Independent Business is holding out for even bigger breaks for small business. Republican leaders want to force a House vote by Thanksgiving—which would be a far cry from the 1986 tax reform bill, which took two years to get through the legislative process. My favorite quote of the day comes from Rep. Tom MacArthur of New Jersey, who said: “I’m not sure this gets better with time. It’s not like a fine bottle of wine.”

In other news, the President made good on CEO Daily’s prediction that he would pick Jerome Powell as Fed Chief. Powell is a good choice—an old school Republican, moderate deregulator, consensus builder, with experience in crisis management—which, in all probability, he will need.

More news below—and enjoy the weekend.

Alan Murray
@alansmurray
alan.murray@fortune.com

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