DealBook Briefing: Another Roller-Coaster Ride for the Tax Overhaul

Good Friday morning. It was a late night for Senate Republicans, as they scrambled to amend their tax overhaul after being denied a way to automatically raise tax rates to help pay for the changes. Markets closed higher yesterday — but did so because investors thought the tax plan was a done deal. And another prominent tech investor has been accused of sexual misconduct.

Senators are still expected to vote today on the proposal. But its chances of succeeding may come down to whether deficit hawks in the Senate like Bob Corker of Tennessee can be convinced that the overhaul will not add to the national deficit. Last night, lawmakers were pushed to remove a provision that would have automatically raised tax rates if economic growth did not prove strong enough to pay for cuts.

That’s on top of other bad news for Senate Republicans, including the Joint Committee on Taxation finding that the bill would add $1 trillion to the deficit, though G.O.P. officials largely dismissed that conclusion. Here’s a handy breakdown of various analyses of the bill’s potential effect on the deficit.

Republicans still must win over Mr. Corker, Susan Collins of Maine, Jeff Flake of Arizona and Ron Johnson of Wisconsin

How Republican leaders are proposing to find at least $400 billion in new revenue

• Slowly raising corporate rates above 20 percent

• Huge automatic cuts to government programs, from Medicare to farm subsidies to student loans

The big problem

According to Caitlin Owens of Axios:

Worth noting

Via Carl Quintanilla of CNBC.

The tax flyaround

• The C.E.O. of the online investment firm Betterment writes that a provision in the Senate bill requiring investors to sell their oldest shares first as part of any divestment would “dramatically harm millions of retail investors.” (InvestmentNews)

• How different industries would fare under the Republican tax plans. (WSJ)

• President Trump says that he wouldn’t personally benefit from the Republican tax proposals. That’s not true, according to Jim Stewart. (NYT)

• G.E. successfully persuaded lawmakers in the Senate to keep a provision that allows the conglomerate to use losses of some overseas units in calculations of its tax liability. (WSJ)

• A group of academics, economists and think-tank officials asserted that the current Republican tax plans won’t prevent companies from shifting profit to low-tax countries. (DealBook)

• Foreign companies doing business in the United States worry that they would have to pay more in American taxes under the proposals. (WSJ)


Today’s DealBook briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.


The Dow Jones industrial average smashed through 24,000 on Thursday, largely on increased optimism that the Senate would pass its tax bill. The Dow has had 63 record closes this year, and it has crossed five one-thousand-point markers this year, the most ever.

But today is a new day. Futures in both the Dow and the S.&P. 500 were down in premarket trading.

Why investors shouldn’t be so optimistic on taxes: Lower corporate tax bills might not bolster the earnings of big companies that much. “The effective tax rate among S.&P. 500 companies is already 26 percent. A 20 percent corporate tax rate would help, but it would not be as big a boon to large companies as it would be to small companies,” Jack Ablin, chief investment officer at BMO Private Bank, told CNBC.

If the Senate tax bill fails …

Mr. Van Saun told the NYT that stock markets could plunge as much as 15 percent if the tax cut were to be derailed in Congress.

The pessimistic line on the market: “All good things must come to an end,” strategists at Goldman Sachs wrote in a recent note, according to Bloomberg.

Mr. Pishevar, an outspoken venture capitalist who was an early backer of digital darlings like Uber and Airbnb and is a major donor to Democratic politicians, is accused of repeatedly assaulting or harassing women. Five women spoke with Bloomberg about what they said were incidents of him forcibly kissing, groping or otherwise harassing them.

And it had been previously reported that he had been arrested in London earlier this year after being accused of assaulting a woman, though he was released by police.

In a statement, Mr. Pishevar denied the claims and said he was the victim of “an organized smear campaign.”

The context: Three other prominent investors — Steve Jurvetson, Justin Caldbeck and Dave McClure — have left or been forced out of their firms following accusations of sexual misconduct.

More in sexual misconduct news

• Matt Lauer apologized after he was fired by NBC, but asserted that some of the claims against him were “mischaracterized” or untrue. His former boss, the CNN President Jeff Zucker, said that he had been unaware of inappropriate behavior. (NYT, NYT)

• Top House lawmakers, including the minority leader, Nancy Pelosi, called upon Representative John Conyers of Michigan to resign. And more women accused Senator Al Franken of Minnesota of inappropriate touching. (NYT)

• The hip-hop mogul Russell Simmons has resigned from his companies after a second woman accused him of sexually assaulting her. (LAT)

CVS is closing in on an agreement to buy Aetna for more than $66 billion, in which it would pay at least $200 per Aetna share, according to the WSJ. (Michael has heard the same thing.) A transaction could come as soon as Monday.

Shares in CVS rose on the news, but those in Aetna hadn’t risen much. The research analyst Ana Gupte of Leerink Partners told Bloomberg that Aetna shareholders may be worried about how much of the offer would be in CVS stock, given the complexity of putting together a big pharmacy chain and a health insurance provider — in other words, two relatively dissimilar businesses.

A reminder of what’s helping drive the deal: It’s Amazon.

The Economist takes a close look at the civil war in Yemen, which the magazine calls “the worst humanitarian crisis in the world,” and the kingdom’s role in it:

It’s another critical look at Saudi Arabia, which has been courting the international business community while also shocking business leaders with its mass detention of royals, including the businessman Prince Alwaleed bin Talal.

An exclusive from our NYT colleague David Gelles:

Erica Berthou and Jordan Murray, two senior investment fund lawyers, are jumping to Kirkland & Ellis from Debevoise & Plimpton. Both will be partners in Kirkland’s Investment Funds Group.

At Debevoise, Ms. Berthou was leader of the firm’s global investment management and funds group, and Mr. Murray was deputy chair of the global corporate department.

“Their experience and talent will be a major benefit to our many private equity sponsor clients and will significantly enhance our global platform, which aims to provide full coverage throughout the life cycle of a fund,” John O’Neil, global head of Kirkland’s investment funds group, said in an internal memo that will go out this morning.

• The Blue Apron co-founder Matt Salzberg has stepped down as C.E.O. The stock of the meal kit delivery pioneer tumbled after its I.P.O. (Blue Apron)

• The White House will name Jelena McWilliams, an executive at the Fifth Third bank, as the next head of the F.D.I.C. (Reuters)

• The Aspen Institute has named Dan Porterfield, president of Franklin & Marshall College in Pennsylvania, as its next president. He will succeed Walter Isaacson on June 1. (Aspen Institute)

• Pinterest’s president, Tim Kendall, is leaving the social network to create a health care start-up. (Recode)

• Cruise, the self-driving business that G.M. acquired, has hired A. G. Gangadhar, a former Uber executive, as its chief technology officer. The move was criticized by Susan Fowler, the Uber whistle-blower who has described a hostile work environment at the department that Mr. Gangadhar had led. (Recode)

• KKR named 23 new members and 44 new managing directors. (KKR)

• Lloyd Blankfein has left open the possibility that he will be succeeded as Goldman Sachs’s C.E.O. by not one but two people. (FT)

• The state of South Australia announced that it had powered up the world’s biggest battery, a feat already being heralded as an engineering marvel — courtesy of Elon Musk. (NYT)

• Carlyle Group is approaching the $18.5 billion cap for a flagship buyout pool that will be the largest targeting deals in North America, according to people with knowledge of the situation. The investment firm also said it had agreed to sell a stake in the bond manager TCW Group to Nippon Life Insurance of Japan. (Bloomberg, WSJ)

• Tudor Investment is closing its Discretionary Macro fund and allowing investors shift assets to the main BVI fund as of next month, according to an investor letter. (Bloomberg)

• Time Inc. sold Sunset magazine to Regent, a private equity firm in Beverly Hills, Calif. (NYT)

• Companies in China, including Alibaba, Tencent and Baidu, are required to help China’s government hunt criminal suspects and silence political dissent, and their technology is being used to create cities wired for surveillance. (WSJ)

• A week after becoming SandRidge Energy’s biggest shareholder, Carl Icahn has sent a letter to the oil and gas company’s board, criticizing its move to block him from buying more stock, and taking aim at management and pay. (WSJ)

• Mr. Icahn compared Bitcoin to a land bubble in Mississippi in the 18th century. (CNBC)

• Jeremy Corbyn, the leader of the opposition Labour Party in Britain, labeled the financial sector “speculators and gamblers who crashed our economy,” singling out Morgan Stanley for criticism. (FT)

Each weekday, DealBook reporters in New York and London offer commentary and analysis on the day’s most important business news. Want this in your own email inbox? Here’s the sign-up.

You can find live updates of DealBook coverage throughout the day at

Follow Andrew Ross Sorkin @andrewrsorkin, Michael J. de la Merced @m_delamerced and Amie Tsang @amietsang on Twitter.

We’d love your feedback as we experiment with the writing, format and design of this briefing. Please email thoughts and suggestions to