Axios - Business

In tax plan negotiations, corporate rate currently sits at 21%

Rubio. Photo: Pablo Martinez Monsivais / AP

The corporate tax rate currently stands at 21%, according to three sources familiar, as lawmakers work to finalize the tax bill they hope to vote on by next week.

  • Why it matters: Both the House and Senate passed bills that would cut the top corporate rate to 20%, but hours after the Senate bill passed, President Trump said he would accept a 22% rate.
  • Sen. Marco Rubio tweeted on Tuesday, likely referring to reports that the individual rate is being lowered to 37%: "20.94% Corp. rate to pay for tax cut for working family making $40k was anti-growth but 21% to cut tax for couples making $1million is fine?" Rubio had wanted to raise the corporate tax to pay for a more generous child tax credit, but was shut down.
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Charming Charlie becomes 20th major retailer to file for bankruptcy this year

Charming Charlie, the Houston-based jewelry and accessories retailer, announced Tuesday that it reached an agreement with lenders and equity sponsors to clear the way for its filing of Chapter 11 bankruptcy.

What went wrong: Charming Charlie's bread-and-butter, affordable jewlery, is an ideal product for online sellers, given that it can be warehoused and shipped cheaply. What's more, even as business migrated online, Charming Charlie overextended itself, opening 79 stores between 2013 and 2015.

Why it matters: It's the twentieth major retailer to have filed for bankruptcy protection in 2017.

Charming Charlie burst onto the retail scene in 2004, with stores uniquely organized by color, and offering products at prices between high-end jewlery stores and discount shops like Claire's, which is aimed at the teenage market.


GOP lawmakers consider lowering top earners' tax rate to 37%

A presidential limousine parked on Capitol Hill. Photo: Susan Walsh / AP

Republicans in Congress are in talks to cut the income tax rate for the nation's top earners from 39.6% to 37%, the Washington Post reports, citing sources familiar with the negotiations, which are continuing.

The change is in response to "complaints from wealthy taxpayers in New York and elsewhere that their taxes could go up under the legislation because of other changes it makes to the code," the paper says.

Why it matters: Cutting the top rate would only worsen the tax plan's reputation for benefiting the wealthiest Americans. A cut in the top rate woud spark a "furious response" from Democrats, the Post says.


Tax bill negotiators agree to reduce mortgage interest deduction

House Ways and Means Committee Chairman Rep. Kevin Brady. Photo: J. Scott Applewhite / AP

House and Senate negotiators have agreed to scale back the mortgage interest deduction in the latest version of the GOP tax bill, two congressional aides told AP. The move means homeowners will now be able to deduct interest on the first $750,000 of a new mortgage, down from the current limit of $1 million.

The details: The House wanted to reduce the deduction to the first $500,000, while the Senate wanted to maintain the current limit. But with both chambers scrambling to hash out their differences and get a finished bill on President Trump's desk by next week, the aides said negotiators decided to meet in the middle.

More from AP:

  • House Ways and Means Committee chairman Kevin Brady: "We're on track to finish" this week. "It's not like people don't know these issues" that are being debated in conference, he said.
  • One key issue that remains: How to appease GOP lawmakers from high-tax states that would bear the brunt of the elimination of the state and local tax deduction (SALT).
  • Go deeper: Yesterday, the Treasury Department released a one-page analysis of the tax plan.

Aetna won't charge copays for opioid overdose drug Narcan

Aetna is lifting copays for Narcan. Photo: John Minchillo / AP

Aetna will waive copays for Narcan, a medication that reverses opioid overdoses, starting Jan. 1. Narcan copays could be as much as $150 for some Aetna enrollees, but the company said $30 to $40 has been a more common range.

Why it matters: Health insurers have been spotlighted as enabling the opioid epidemic and now are focusing on ways to prevent or manage addiction. The other major national health insurers — Anthem, Cigna, Humana and UnitedHealthcare — did not immediately respond when asked whether they would copy Aetna's policy.


Apple doesn't like to say how much it pays for acquisitions

Apple yesterday confirmed its rumored acquisition of music identification app Shazam, but declined to say how much it paid (some reports suggest around $400 million).

Bottom line: This is normal operating procedure for Apple, which has only disclosed purchase prices for 15 of its 68 acquisitions, according to Thomson Reuters.

Reproduced from Thomson Reuters Dals Intelligence; Note: Data as of Dec. 11, 2017; Chart: Axios Visuals

Mall owner Westfield being bought for $16 billion

Photo by Cameron Spencer/Getty

Unibail-Rodamco of France has agreed to acquire Westfield Corp., an Australia-based shopping mall company with several large U.S. properties, for $15.8 billion.

Why it matters: Because this comes just one day after GGP rejected a $14.8 billion takeover offer from Brookfield Property Partners, and could double as revised pricing guidance for that transaction. Let alone whatever someone might bid for Macerich, which is under pressure from activist Dan Loeb.

Plus, if malls are dying, no one bothered to tell the M&A market.

Bottom line: "If I am an anchor store such as Sears and Macy's that do business in a Westfield-owned mall, this deal is petrifying. Department stores don't fit in this new mall as a community world, and an eager property owner may try to push them out via higher rents in order to redevelop the space for 2040." — Brian Sozzi, TheStreet


Comparison shopping is bogging down the Fed

Shoppers roam through an Amazon Go store. Photo: Elaine Thompson / AP

Holiday shoppers are increasingly using their smartphones to get instant price comparisons to find the best deals, but the feature is making it more difficult for the Federal Reserve to manipulate interest rates, reports the WSJ.

Why it matters: The rise of consumer knowledge and price-checking is muddying the Fed's clarity on how much and how fast to implement interest rate hikes, as it restricts retailers' ability to charge different prices online and in stores. The result is bogged down inflation in advanced economies, like the U.S. and China.


Trump and Macron an ocean apart on climate

On the eve of the One Planet Summit he is hosting in Paris today with the World Bank and United Nations, French President Emmanuel Macron told CBS News that Trump's move to abandon the Paris climate deal was a mistake, but one that has "counter-momentum" in favor of curbing emissions.

Trump's move was "a deep wakeup call for the private sectors and some of us to say, 'Wow, so we have to react.' If we decide not to move and not change our way to produce, to invest, to behave, we will be responsible for billions of victims."
— French President Emmanuel Macron

The event, to which Trump was not invited, features a range of new commitments and pledges.

Yes, but: Back in Washington, E&E News reports on White House plans to promote U.S. coal exports and more efficient use of coal in other countries reliant on the fuel.

White House international energy aide George David Banks is leading the "Clean Coal Alliance," which also includes natural gas exports, E&E News says. Per E&E News:

  • Formal outreach to other countries hasn't begun, the Trump administration is expected to invite big coal exporters and importers like Australia, Indonesia, China, India, Ukraine, Poland, and Japan and others.
  • An administration official said, "The U.S. is considering pulling together a group of countries that support using cleaner, more efficient fossil fuels," and the story notes that Banks talked about the effort in a meeting last week with lawmakers and companies including Peabody Energy, FirstEnergy and Arch Coal.

Our thought bubble: The move highlights the contradictory nature of the White House posture on climate — what my colleague Amy Harder calls "Trump's conflicting climate agenda" in this column.

Officials at the highest levels of the Trump administration dispute the scientific consensus that human activities have been the primary driver of global warming for over a half century. But amid the skepticism, a global policy stance of sorts has emerged in international meetings including the recent UN talks in Bonn.

It's one that favors fossil fuels (with a nod to nuclear power too). It justifies the stance by arguing that surging global energy demand dictates that top priorities should be using coal more efficiently, promoting carbon capture development, and natural gas.


Microsoft vet Julie Larson-Green joins Qualtrics

Longtime Microsoft executive Julie Larson-Green has agreed to join privately-held Qualtrics as its first chief experience officer.

Why it matters: Larson-Green once led Microsoft's Windows group, and once was viewed as a possible CEO successor to Steve Ballmer (the role that eventually went to Satya Nadella). She also held prominent roles in the Office and Microsoft devices units.

Qualtrics, a Utah-based corporate survey and analytics that has a second headquarters in Seattle, originally contacted Larson-Green about joining its board of directors. "It turned out she was leaving Microsoft and we had this other search ongoing for a chief experience officer," explains Qualtrics founder and CEO Ryan Smith. "She'll run product design for us, plus all other experience-related areas that people have with the company."

Smith declined to comment on how his company's IPO plans are progressing, except to note that Qualtrics did recently add a chief financial officer.