Elon Musk’s New Rocket Plan, Tax Overhaul Pushback: DealBook Briefing
• Republicans from high-tax districts and (again) real estate agents are pushing back against eliminating or limiting deductions for state and local taxes.
• Progressive groups have warned that the cuts would disproportionately benefit the rich.
Keeping quiet: deficit hawks.
But then Treasury Secretary Steven Mnuchin maintains that they have no need to worry.
WSJ’s Kate Davidson:
“Not only will this tax plan pay for itself, but it will pay down debt,” he said at a conference in Washington, arguing the proposal would fuel stronger growth, causing tax payments to rise and offsetting the revenue lost from lower rates. He also said lower rates would discourage corporate tax avoidance, which would help boost revenue.
Speaking of Mr. Mnuchin
WSJ: “Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners”
Ikea Buys TaskRabbit: D.I.Y., or Don’t
By buying TaskRabbit — the service that connects consumers with freelance workers who can assemble furniture or make quick deliveries — Ikea wants to become a one-stop shop for turning planks of wood into a wardrobe.
Recode’s Kara Swisher and Theodore Schleifer:
The price of the deal could not be determined, but the contract labor marketplace company has raised about $50 million since it was founded nine years ago. Sources added that TaskRabbit will become an independent subsidiary within Ikea and that C.E.O. Stacy Brown-Philpot and its staff would remain.
Pitchbook says that Ikea’s previous acquisitions have ranged in price from $20 million to $90 million, according to Recode.
But the deal is moving Ikea into the controversy over the “gig economy.”
WSJ’s Saabira Chaudhuri and Eliot Brown:
By purchasing TaskRabbit, Ikea is risking wading into a legal fray that has vexed Silicon Valley businesses that rely on freelancers. Workers, most notably of Uber, have sued such companies, saying they should be treated as employees rather than independent contractors, and get benefits such as minimum wages and paid vacations.
Someone Isn’t Happy With Twitter’s Russia Testimony
“[The presentation to the Senate] showed an enormous lack of understanding from the Twitter team of how serious this issue is, the threat it poses to democratic institutions and again begs many more questions than they offered. Their response was frankly inadequate on every level.”
— Senator Mark Warner, Democrat of Virginia and vice chairman of the Senate Intelligence Committee, according to The NYT’s Nicholas Fandos and Scott Shane.
Uber’s Battles: London, and Maybe a Lyft I.P.O.
Uber’s chief executive, Dara Khosrowshahi, has been publicly contrite as he tries to get back into London regulators’ good graces. But it isn’t clear that his attitude has seeped through to the rest of the company.
NYT’s Jim Stewart:
[London Mayor Sadiq] Khan pointedly contrasted Mr. Khosrowshahi’s approach to that of officials in Uber’s London operation, whom he described as arrogant. “I just wish Uber U.K. had acted in a similar manner in the recent past,” Mr. Khan told The Evening Standard. “This arrogance where big companies that have lots of customers don’t have to play by the rules is one that I think is wrong.”
But Uber appears to have won the backing of one British politician: Prime Minister Theresa May.
BBC: “The decision to stop Uber operating in London was ‘disproportionate’ and has put thousands of jobs at risk, the prime minister has told the BBC.”
Lyft is still far smaller than Uber, and it operates only in the United States. But as it prepares to raise money — through a new fund-raising round, an initial public offering, or both — it could cause headaches for its bigger rival.
Breakingviews’s Robert Cyran:
Additional capital – whether from new investors, an I.P.O., or both – would help it expand into more cities, and gain riders and drivers. . … Fresh financial firepower would enable the company to take advantage of Uber’s woes, and should help close the tremendous valuation gap between the two firms.
Bloomberg’s Leila Abboud reminds us that Uber’s losses are still huge, reaching $2.8 billion last year.
Asia’s Woman Problem
Most of the richest men in China, Japan and South Korea run companies with few, if any, female board members.
Bloomberg’s Bruce Einhorn:
Many of Asia’s billionaires are less likely to have women on their boards because they control their companies through their own shareholdings or those of family members and family-controlled entities, according to Suken Bhandari, Singapore-based head of advisory for the region for ISS Corporate Solutions, a U.S.-based consulting firm.
This isn’t just about being fair. It’s about being responsible, argues Bloomberg’s Shelly Banjo:
Although women control the lion’s share of consumer spending, they’ve accounted for less than 10 percent of [Samsonite’s] net sales.
“Most of the people running the company are men and as a masculine brand, we were predominantly designing products and stores with men in mind,” C.E.O. Ramesh Tainwala explained.
• Robin Sidel, a longtime financial reporter at the WSJ, is moving to the financial analytics firm Novantas as a director and head of its center for the future of banking.
• Kara Scannell is moving from the FT, where she was a senior finance correspondent, to CNN.
Your Friday Reading: Steve Ballmer’s Coaching Career
Before the former Microsoft C.E.O. was shouting on the sidelines of the Los Angeles Clippers, which he owns, he was screaming on the sidelines of a third-grade basketball team that he coached in Bellevue, Wash.
From Zach Schwartz, one of his former players, on The Ringer:
Steve took coaching seriously and even brought in an NBA shooting coach to help us with our form. Steve loved the team, and we loved playing for Steve. He was running one of the most successful companies on earth and still making time to coach us. He never missed one of our games.
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