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November 17, 2017

Good morning.

The House of Representatives passed its tax cut/tax reform bill on Thursday by a neat 227-205. Only thirteen Republicans dissented. The bill provides a much needed rewrite of the corporate tax system, lowering the top tax rate to 20%, allowing companies to expense equipment investment, and creating a territorial tax system. The changes on the individual side are more modest, but reduce the number of tax brackets from seven to four, and limit many popular deductions.

The House vote was a much needed victory for Republican leaders; the Senate will prove harder. As Mitch McConnell joked recently, being Senate Majority Leader these days is a lot like being groundskeeper at a cemetery; everybody is under you, but nobody is paying attention. McConnell has made the task more difficult by throwing healthcare into the mix, which helps cover the bill’s cost but also raises its political stakes. Still, that puts the Republican leaders and President Trump on a possible path to achieve their two biggest legislative goals—tax reform and repeal of Obamacare—by Christmas. Who would have guessed?

Meanwhile, be sure to read Michal Lev-Ram’s story on PayPal CEO Dan Schulman, number 8 on the Fortune Businessperson of the Year list for 2017. The company’s revenue grew an impressive 17% last year, and he has grand visions for remaking the future of finance.

News below—and enjoy the weekend.

Alan Murray
@alansmurray
alan.murray@fortune.com
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Top News

Hens in the Foxhouse

Verizon, Comcast and Sony have all been sniffing around 21st Century Fox since confirmation of its (ultimately fruitless) talks with Disney effectively put the company on the block. The WSJ reports that Fox is willing to part with the 20th Century Fox movie studio, some U.S. cable networks and its international business (including, by extension, the effort to consolidate control of U.K.-based Sky Plc). A formal approach from any quarter may be unlikely until the Justice Department formally lays out its concerns about the AT&T-Time Warner deal. Fortune

Volkswagen Puts Dieselgate Behind It

Volkswagen's supervisory board is set to sign off on an $82.5 billion five-year investment plan that will flesh out its aspirations to become a world leader in electric vehicles. Around $12 billion of that is earmarked for making EVs in China, which has the most stringent mandate of any major market for sales quotas of low-emission cars. VW's plan shows how the company has internalized the need for transformation. It will also shed light on how the power struggle between its various brands is playing out in the wake of Dieselgate. VW's shares, meanwhile, may close above their pre-Dieselgate level for the first time today. Fortune

The Bitcoin Bandwagon Gets Back in Gear

Bitcoin surged to a new all-time high after one of the most prominent exchanges for the cryptocurrency, Coinbase, announced it would roll out a new range of services aimed at institutional players such as hedge funds. The move underlines how Bitcoin is increasingly attracting big money players. Of more prosaic, real-world importance in the blockchain space—American Express and Santander said they will start offering corporate clients U.S.-U.K. payment services based on the blockchain of the startup Ripple. Fortune

Cisco Resuscitated

Shares in Cisco Systems rose over 5% to a 10-year high after it forecast a first quarterly increase in sales in two years. Revenue in the three months to October fell 2% on the year, but that was above expectations. Contributions from new acquisitions such as cyber security business OpenDNS and software company AppDynamics are expected to hasten its transformation from a maker of networking equipment into a provider of Software as a Service. Fortune

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content from Deloitte
Growing art & wealth nexus
With high-net-worth individuals increasingly focused on art as an investment, wealth managers are getting more proactive in addressing art and collectible wealth, finds Deloitte and ArtTactic's Art & Finance Report 2017.
Read More Here
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Around the Water Cooler

Funkin' for Jamaika

Angela Merkel should put the finishing touches to her new German coalition over the weekend, notwithstanding some last-minute brinkmanship and histrionics from the two junior parties in the three-way pact. The ‘Jamaika' coalition—so named because the three parties' colors are those of the island nation's flag—missed a self-imposed deadline yesterday, amid differences over cuts to personal incomes taxes, immigration restrictions, and a timetable for shuttering coal-fired power stations. If they really can't bridge those differences, then new elections beckon. But Germany's political mainstream typically finds a way to compromise, and it would take something cataclysmic to derail a German economy that is in full swing. FT, metered access

Hall of Shame, Friday Update

Democratic Senator Al Franken became the latest prominent figure to be accused of sexual harassment, LA radio anchor Leann Tweeden spilling the tawdry details. Democrat colleagues rushed to distance themselves from the Minnesota senator. The news competed for attention with yet more tales of Kevin Spacey's predations while artistic director at London's Old Vic theater. Meanwhile, momentum around the issue is stoking more calls for a reassessment of Bill Clinton's record in the 1990s—and the fateful decision of the feminist left to stand by him. Fortune

Kushner's Incomplete Submissions

Jared Kushner withheld evidence that he knew of contacts between the Trump campaign and Wikileaks in 2016, the Senate Judiciary Committee said. Kushner, President Trump's son-in-law and a senior White House advisor, had voluntarily submitted documents to the Senate's investigation into alleged collusion with Russia, but did not include an e-mail in which Wikileaks reportedly offered the campaign a "Russian backdoor overture." U.S. intelligence agencies have said Wikileaks acted as a conduit for information that Russian intelligence had stolen from leading Democrats during the campaign. NYT

Meredith and CEO Daily's Sum-of-the-Parts

Magazine publisher Meredith has returned for another bite at Time Inc., having lined up financing commitments from banks and a private equity arm of the Koch brothers' business empire. That's according to The Wall Street Journal's sources. We couldn't possibly comment, but sources close to CEO Daily reckon the purchase price mooted by the WSJ, of up to $2 billion, would just about cover the value of this newsletter and mean that Meredith was getting the rest of the shop for free. WSJ, subscription required

Summaries by Geoffrey Smith; geoffrey.smith@fortune.com

@geoffreytsmith

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