The epic American road trip, famously, starts in Missouri on Route 66. Donald Trump’s tax reform is no exception. The president chose Springfield, Mo., as the place from which to launch his efforts to get a package through Congress yesterday, appealing for bipartisan support for his team’s ideas.
The speech repeated the familiar aims of cutting the rate of corporate income tax to 15% and making it easier for U.S. companies to repatriate profits earned abroad. It also included the goals of simplifying the tax filing procedure for individuals and cutting individual tax rates. However, it offered few new details of how those goals can be achieved without causing a serious shortfall in the federal budget. Specifically, there is still no clear plan in sight to replace the revenues that Trump had initially hoped to raise with a Border Adjustment Tax.
Trump appeared to acknowledge yesterday that his proposals will need support from both sides of the aisle to stand any chance of passing. That suggests that some lessons have been learned from the failure to get a health care reform bill through Congress earlier this year. Initial noises coming from the Democratic Party suggest that—inevitably, for this stage of the process—they aren’t minded to play ball. Optimists will hope that the need to agree a speedy package of federal assistance for the victims of Hurricane Harvey will reacquaint Congress with the charms of bipartisanship. Cynics will expect little movement from either side until it becomes clear who the public intends to blame at next year’s midterms for continued gridlock.
Buckle up—the ride is sure to be long and bumpy.
• Uber’s New CEO Won't Hurry to an IPO
Uber’s new CEO Dara Khosrowshahi said he aimed to take the ride-hailing company public within 18-36 months. That should give him plenty of time to address the most serious of the governance issues at the company, albeit in a competitive environment that is getting considerably tougher, at least outside the U.S.. One of Khosrowshahi’s first tasks will be to find a chairman to replace founder Garrett Camp. An interesting subplot, at least for Uber users, is also emerging: the new CEO is on the record as a digital currency enthusisast, prompting speculation that the company may start accepting Bitcoin as a payment method. Fortune
• GDP, ADP Show Economy in Good Health
The economy grew by more than thought in the second quarter of the year. The Commerce Department said gross domestic product rose by an annualized 3%, rather than the 2.6% initially reported, thanks to stronger household spending and business investment. That’s the fastest growth in over two years. A stronger-than-expected ADP employment survey released yesterday suggests that the momentum was sustained at least through August. Reuters
• Apple in Last-Minute Bid for Toshiba Chip Business
Toshiba missed a self-imposed deadline of selling its chip business by the end of August, after last-minute bid from groups led by Bain Capital increased competition for the prized asset. Toshiba needs to squeeze every last penny from the sale to cover the hole in its balance sheet caused by its nuclear power business. According to some reports, Apple is one of the backers of Bain’s $18 billion offer. Reuters
• Fuel Prices Spike as Refinery Outages Spread
Gasoline prices continue to spike higher as the closure of more and more refineries in Texas and Louisiana disrupts the supply of fuel to East Coast markets. Motiva, owned by Saudi Aramco, shut down the U.S.’s biggest refinery at Port Arthur Wednesday. With the storm threatening the Lake Charles area as well as the Texas coast, nearly one-third of U.S. refining capacity is either shut in or operating at reduced levels. Refineries needed up to two months to return to normal running levels after Hurricane Katrina in 2005, which shut in a comparable amount of capacity. CNBC
Around the Water Cooler
• Wal-Mart Taps NVidia for Cloud Support
Chipmaker NVidia has added Wal-Mart to the fast-growing number of corporate customers for its graphical processing units, or GPUs. According to a note from Global Equities Research, Wal-Mart is planning to use clusters of NVidia chips in a ‘GPU Farm’ around one-tenth the size of Amazon Web Services’ GPU cloud. Wal-Mart had always been leery of using AWS to service its cloud computing needs, and Amazon’s takeover of Whole Foods has only reinforced that sentiment. Fortune
• Google’s Liberalism Has Its Limits
Google found itself at the center of another PR storm after the New York Times reported chairman Eric Schmidt had pressured the left-leaning NGO New America (which Google supports with donations) to fire an academic, along with his support team, who had praised the EU’s decision to fine it for antitrust breaches. Both Google and the think-tank disputed the NYT’s account. The academic in question, Barry Lynn, has meanwhile set up a new website called “Citizens Against Monopoly”. Fortune
• Disney Plans Big Job Cuts at ABC
Walt Disney is preparing to take the ax to ABC in response to the structural challenges facing traditional TV networks, according to The Wall Street Journal. The WSJ said Disney wants to cut ABC’s cost base by 10%, although the number of job cuts it mentioned— no more than 300—represents only 3% of ABC’s workforce. ABC’s ratings have slipped badly in the last year as newer platforms such as Netflix, Hulu and Amazon Prime have gained ground. Fortune
• Big Banks Back Digital Currency Project
Six of the world’s largest banks have joined a project to create a digital currency that will allow them to clear and settle financial transactions via blockchain. The “utility settlement coin,” a brainchild of Clearmatics Technologie backed by Deutsche Bank, BNY Mellon and Santander, has now secured the support of UBS, Credit Suisse, HSBC, Canadian Imperial Bank of Commerce, Mitsubishi UFG, and State Street. The Financial Times quoted a UBS executive as targeting a “go live” date towards the end of next year. Fortune
Summaries by Geoffrey Smith; firstname.lastname@example.org