carol: welcome to bloomberg businessweek. i'm carol massar. julia: i'm julia chatterley. carol: the republican tax proposal. who gets what? julia: all that is ahead in "bloomberg businessweek" carol: we are here with the

editor-in-chief, megan murphy. you have a big focus on tax reform this week. in "business week," in the business section, you guys layout graphic. megan: we took a close look at the house plan. it is a serious attempts to implement major changes to the u.s. tax structure. but also, there is just so much at politically. stake with this politically. , and it is fascinating that a year after the election we are , 2016, giving to what republicans universally say is the real thing that they have to get it done now tax reform. ,and its tax reform. when anyone tries to get this done, there is a reason why it has failed traditionally in the past. its because the u.s. tax code is so complex and there are so many -- vestederest trees industries and sectors and people and special interest groups that relied on parts of the tax code that in a normal, system, you would

not have had in there. what is fascinating about the tax plan is how much that it raises the deficit which has long been anathema for republicans. but it is also fun to make the numbers work, how much they look at smaller, limited parts of the code that will make a difference here, but have really entrenched interests. julia: it is ok when you add those pieces together to make the money as long as you have the votes. and actually when we look at the , tensions of the republican party, that is what it comes down to. megan: its going to be really hard on two things. i'm glad you brought that up. number one, i would describe the rollout of this plan, kindly, as botched. i think there was a acknowledgment among the republican party that it did not do enough to help base voters and the core working-class, or middle-class, upper-middle-class voters. so they have made attempts to correct that. but the other thing is that in

trying to correct that, they have also alienated states, particularly areas of the country that have higher pockets of upper-middle-class earners. new jersey, new york. places with higher estate taxes who are really going to be resistant to the changes and have little political reason, now to stay on what we would , call the trump train. it will be fascinating to see intobattle play out and go the senate. moving the party the way that he needs to move it. carol: the elections this week will have an impact. you talk about political will. megan: massive impact. you see it all over described as weak as a democratic tsunami. big wins in virginia, big wins in new jersey. it doesn't seem like, particularly college-educated voters, younger voters, where were they 2016? they came out this week. it will be interesting how many republicans see this writing on the wall and say that trump will

not take us over the line in what i call purple states as we , say. informing their own political ideology and away from me to what we call the ban and ask, the true nativist impulses. new jersey showed that there are choices to be made. julia: they remained tax mad on the front cover story. in the united states, at least. and when we look at the evolution of taxes, in the united states, our bloomberg has focused on that. explain your thinking behind this. we asked justin to go back and explain the cover story for this week and say, how did we get here justin explains his here?ow did we get i think when people read it they will be fascinated to see not only the different eras that we have been through -- so focused

on cap, cut, cut, and we forget the essential purpose of taxation, which is to pay for federal revenues. it is fascinating, what justin said. far more eloquently than i could. he talks about alexander hamilton and taft. justin: it seems like definitely since the early 1980's it has become this just, constant obsession. carol: the 1980's, that is when president reagan did massive tax cuts. justin. -- justin: yes. in he did massive tax cuts are 1981, made to this other thing that does little attention while it was happening which was to , index the tax brackets to inflation. because before then, and inflation was in double digits in the 70's, people were being bumped into higher brackets all the time even though they were not really any wealthier. and that was the big thing that drove the revolt. carol: you remind us that

historically the idea of taxes is to raise revenue for the government. justin: yes. and it is sort of an obvious point and in theory is the idea of taxes. carol: but a forgotten point because tax reform has been a political football. well, a lot of it is. and i am sure there were elements of this before, but starting in the 70's but definitely into the 80's and 90's, there was much more serious analysis by economists but also political rhetoric about the economic impact of taxes. and part of that is just because taxes are 17%, 18% of gdp, federal taxes. and in most of the 1800s they were about 2% of gdp. so that is going to have a bigger economic impact. so how you structure the taxes does matter more. but sometimes in the whole discussion about the current tax

like so it just seems much of it is, it is going to do this for the economy, or it is going to mess up the income distribution this way, and there is some attention but it is itte to the side of, will help us raise more money to pay for government or not? carol: will it? justin: no. it will reduce revenue. i don't think there is any, even from people who are very much in favor of it, the way that it is structured now, it will increase the deficit and reduce revenue, even if it results in increased economic growth. carol: you remind us that we have been in, and living in, for decades a modern tax policy era. , will it ever end? because there was a point in our country's history that we did not have taxes. kind of a no tax era. justin: there was to did not -- and it did not work very well. this was before the constitution and after independence, from

from 1776 to -- basically. 1779, the articles of confederation, the initial sort of constitution of the nomination, had no provision to raise taxes. they had to ask the states. they had to ask nicely. carol: good luck. justin: it is one of the reasons why people from the state said maybe we should put something together so they can raise money. and that was a key element of the constitution, that it made clear that congress could levy taxes. julia: making tax reform the cover image was the job of the design director. >> chris, the lawmakers working on a tax reform tech, you spent a lot of time on the cover of this week, talking about taxes this week. you had to make it to a cover image. what did you think about? >> naturally, taxes are not the most visual thing. thought it was more typographic. the idea was to create something that represented the confusion

and off you station of the tax system. we came up with the idea of so taking these tax terms and overlaying them behind the headline. julia: you can say, the confusion, perhaps that the tax system generates is illustrated in the blue and bold text. why is the system such a mess? >> we wanted the headline to hit you first. then you have this deeper, you are searching. and you are trying to find what the words are. carol: when i first saw the cover, i was completely confused. which is what the tax system is about. lawmakers are trying to maybe clear up, but we will have to see. did you have a lot of ideas or not really? >> most of them were typographic. we work through a bunch of options. we started with murder ideas that we ended up clean. julia: it is punching. -- we started with many ideas but we ended up clean.

this color that we chose, appearing in charge for reagan era stuff. carol: an era where there was a lot of tax reform and changes. chris, thank you. fund titane hedge behind steve bannon may not be finished with politics. julia: plus allegations of , sexual harassment. carol: this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar are. : i'm julie chatterley. you can find us online at businessweek.com. carol: and on the mobile app. in the politics section, billionaire mega-donor robert mercer is known for bankrolling the nationalist movement that

elected donald trump. julia: he is positioning himself to be even more politically active. >> robert mercer is the officer ofecutive renaissance technologies, perhaps the most profitable hedge fund in the history of the world. financer also the behind this brand of kind of insurgent republican nationalist insurgency that propelled donald trump to the presidency last year. carroll: and specifically, he is involved with steve bannon and breitbart. big-time. >> that's right. he has been bannon's atm for his projects. to take over the republican party, push it in a populist, nationalist direction. mercer basically bailed out breitbart news when it was floundering and turned it into what it is today, this successful voice for this brand -- popular wrist,

nationalist brand of conservatism. julia: what is going on here? why is he resigning from renaissance technologies and at the same time selling breitbart news to someone who is quite close to him. explain this specifically. >> when he made this announcement last week on november 2 that he was stepping down from renaissance but also , made comments about his political views, keep in mind that this is a person who has never discussed his political views at all. this is the first time, ever. julia: he kind of needs to, given who he is bankrolling. >> and set off a lot of speculation as whether he is stepping back from bannon's projects in being this conservative mega-donor that he has been in the past couple of years. carol: is he? >> it is interesting. he made a bunch of statements where he says, among other things, he denounces milo young milo y bliss, --

iannopolous this right-wing , provocateur that he giving a lot of money to, and he distances himself from steve bannon. we talk about politics all the time but i make my own decisions. what he is talking about his barber or cabdriver. this is somebody who has been his close political advisor and he bankrolled banon's entire suite of projects over the last three or four years. julia: with breitbart news, are you suggesting that the politics of steve bannon and milo you does not agree with, it is not -- breitbart news may be going somewhere, but it is going very far. explain what is going on to understand what is going on with his conservative values, allegedly. >> josh green had died, who cowrote the piece, and i come up and cowrote with these, talked to people around mercer and bannon. and actually, this is not about

stepping away from bannon, or a change in direction and mercer's politics. if anything, this might free him up to do more. for instance, the sale of breitbart, he says he is selling it to his daughters. his doctor, rebecca, his middle daughter, has always been the one that is the most hands-on in terms of breitbart. she is the one calling and story ideas are complaining about coverage. carol: and working closely with steve bannon. >> that's right. julia: unions have championed themselves as advocates of safe workplaces. carroll: they have, indeed. but reports suggest that the labor movement has work to do. josh: the largest labor federation in the u.s. had its convention a few weeks ago. it happens every four years. and it started in an unusual way. the afl-cio federations ka, readt, richard trump go

to all of the delegates from the recently-strengthened code of conduct against sexual harassment and other kinds of misconduct. and actually presented for all of the delegates contact info for two people they could report inappropriate conduct yo. he told me earlier that morning that there was a zero-tolerance policy of the afl-cio and he thought the federation was on the cutting edge, and if not wanted to be on the cutting edge , on these issues. carol: this is not just about reaction to what has been going on in terms of harvey weinstein and companies coming out about their policy. this is about stuff going on within the afl-cio specifically? josh: there has been this reckoning throughout the culture, as we know, post harvey weinstein, about sexual harassment and misconduct. it is now roiling the u.s. labor movement. what it was that led to some of these announcements, people can speculate about.

the code of conduct of the afl-cio, in fact, goes back to march, to the executive council meeting that they had done. but we now know that there have been serious allegations within the afl-cio, even about conduct going on, allegedly during that , same executive council meeting at which they were approving this new code of conduct. trumka, it wasrd actually his chief budget officer that was in the spotlight. , explain a bit about what happened. josh: perry stapleton, chief officer at the afl-cio, we reported was accused of inappropriate behavior towards female administrative assistance s indministrative assistant the office. we reported that the response of the afl-cio to the allegations, which included pressuring a woman to have a sexual relationship with him, and suggesting that he could protect her job if she did, the reaction

to those allegations from the afl-cio was a series of disciplinary measures including a two-week suspension and making him pay for the cost of additional training around these issues. but he did not lose his senior -staff position at the federation. it was an outcome that many of andit was an outcome that many of the former staff that i spoke to did not think was sufficient. the outcome changed when we reached out to the afl-cio, telling them that we plan to write about this issue. a couple of days later, terry stapleton resigned from his job. carol: up next, president trump hunts for trade deals in asia. and especially, in china. hopes and south korea's for a successful winter olympics next year, well, they are fading fast. carol: this is "bloomberg businessweek." ♪

♪ julia: welcome back to "bloomberg businessweek."

i'm julia chatterley. carol: i'm carol massar. you can also listen to us on radio on sirius xm, am 1330 in boston, and am 960 in the bay area. julia: and in london and in asia on the bloomberg radio plus app. in the politics section, president trump's withdrawal from the transpacific partnership has put him in a difficult position for asian commerce. carol: he is seeing that firsthand with a trip to the region. as one of his first acts in office, pulled out of the transpacific partnership that big 12 nation trade deal , that was high-quality in terms of components that the u.s. like restraints on

ownedbility of state-don' enterprises to subsidize, to get subsidies from the government, and so on. it had a lot of things that countries were reluctant to give and it had been won over intense negotiations, kind of trench warfare. and so when trump pulled out of it, a lot of people saw it as a backward step for the u.s. and i think now we are seeing that that turned out to be the case. carol: we have seen in history that it is better to be a part of these bigger, broader trade agreements. >> think about a u.s. multinational. it does business with multiple countries. and if each country as a separate deal with domestic content rules or 100 other things, that sort of splinters commerce. it is exactly the wrong way to go. what you want is a common set of rules across all of the markets that you play in.

carol: where does that leave president trump and his team in terms of negotiating trade? he has already backed out of tpp. countries do not want to do bilateral rural agreements with no want to do bilateral agreements with him, do they? >> that's right. i talked to a trade expert today who was saying that the u.s. -- not right now. i talked to a trade expert today who was saying that the u.s. is going to find slow going with the likes of japan and korea. they will save the status quo is not terrible. if we think that president trump will make strong demands, we may be better off sticking with what we have. we will help trump save face by going through the motions of talking but we will not make any concessions. they maybe just trying to out-wait him. carol: in the economic section, south korea is preparing to host the olympics. julia: they might have trouble shaking off the threat from

corporatea, and the trouble in south korea. carol: here is our editor. >> it is a perfect storm of bad stuff. it is not just the threat from the north. that making people away. at home, south koreans are demoralized by all of these is scandal's have evolved, some big-name companies that are also sponsors in the game. carol: you are talking about samsung? >> samsung is one prominent one. carol: the government? >> that is right. they do not have big champions of the games this year. in previous years they were strong in ice-skating. so that is all coal -- that is also kind of suppressing the appetite. carol: meanwhile, they are building, right? lots of money. >> they are going to be ready, unlike sochi in russia, where reporters were on social media sending photos of missing

manhole covers and dirty water and the door fell off in my hands. when we checked in on the facility that is going to host the opening and closing was inies, and that mid-october, that wasn't it done. they were putting the finishing touches on that. the area is already a tourist area, mostly domestically. so it has facilities. it is going to be a high-speed rail link from seoul, so people will also be able to stay and take the train and for the day if they are going to see an event. so there hasn't been as much a spending required. carol: i am so they have home and listening to this and thinking, wait a minute. how close is it going to be held? its pretty close to the border with north korea. it's 60 miles. carol: are people buying tickets to events? are they anticipating that people in the south korea or tourists will be coming in?

>> they only sold 30% when we checked, of the 1.1 million tickets. carol: that sounds low. >> it is true that they have set it, and we have seen from past games that ticket sales accelerate as you get closer. you were saying that we have forgotten this is going to happen. and so, they were saying, when the torch relay starts, that is when the world wakes up to the winter, are happening. especially the winter games that , just wrapped up. they are saying that the last three months are crucial. but still they acknowledge that , they are running behind. and the ironic thing is that they have sold more tickets to international buyers, although proportionately, only 350,000 tickets set aside for are set aside for international buyers or 320,000. a much bigger proportion, 750,000, are for south koreans. they are doing better for international buyers than at home. carol: up next, saudi arabia and

one of the most prolific billionaire investors. plus what a shakeup in the , kingdom might mean for the future of the middle east. julia: this is "bloomberg businessweek." ♪ will

julia: welcome back to "bloomberg businessweek." carol: still ahead, what is behind saudi arabia's purge? as it arrests princes and businessmen. julia: plus, the brothers who bought a country in africa. carol: out of the box ideas and a holiday giftgiving guide. julia: all of this still to come on "bloomberg businessweek." ♪ julia: we are back with editor-in-chief megan murphy.

one of the big stories this week has been the focus on saudi arabia. this gentleman may not be the face according to saudi arabia of the country but as far as international investors are concerned, the prince is someone that they recognize and have done business with. megan: detained in this crackdown in something that was so surprising. we cannot underestimate how much this has sent reverberations around the world for not only the kingdom and the middle east but for the american investing community. this is a man incredibly well known for investment in companies like apple and twitter. carol: citigroup. megan: how much money he pumped into that in the 1990's. this is a man whose kingdom corporation, what he has built and what he represents in terms of the modernization of the kingdom, had mostly women working for him, was supportive of allowing women to drive, and was a forward-looking

international face. i think there is a lot of people surprised that are closer political rivals in saudi arabia, he is the one that has emerged as the focal point. carol: people likened it to in the united states, arresting somebody like bill gates. for people who were not familiar with them, it is huge. megan: he has a partnership with bill gates with the four seasons buyouts. this is a man with friends in high places, not only the business titans, but the political titans. a very prominent face. close ties with the media. accessible and transparent. this goes down to what the corruption initiative in saudi arabia, what people are looking at this, and we talk about this throughout the magazine this week, what does this portend for the future? is this a crackdown, there has

been widespread comment on whether or not some of the saudi billionaires including the prince have siphoned off money to funds their own largess their excess spending habits, that is what is being closely watched. what does it mean? is it a slide to the kinds of autocracy that we are not used to seeing? julia: if you're going to reform a country like saudi arabia, it is going to hurt. you need to send a message at this stage that if you are hurting, the the upper class, the royalty are also going to hurt with you if they indeed are corrupt and have been dealing in this way, not in an honest way, that perhaps they should. and that is the message they are trying to send. megan: that is such a great point. the crown prince, in targeting some of the wealthiest people, detained right now in this is about three $3 billion -- $33

billion in individual worth in this crackdown. what is interesting is we have heard from people from the region who say that some of the reformist agenda -- this is a crown prince who is looking to radically transform the economy away from oil dependency into a modern business economy. did he view these people as impediments? perhaps. but it also signals that as i progress away from this society we have built, -- as i pushed us away from the society we about, these people need to see. carol: people have called it the palace purge. he is trying to make significant changes. we talk about others, but there are ministers and folks within the government that are also purged. >> we have talked to people who say that the support for this reformist agenda was not universal. this is the initiative.

for a country that moves almost in lockstep, the factions and the traditional split of power cannot be underestimated. the house of saud was split so that intentionally there was not as much incentive to consolidate power behind one faction. between the military, the government, the economy. now we see this concentration of power around the crown prince. he seems to have been able to consolidate that. whether or not he can pull off his agenda, there are a lot of expectations. julia: he has put his credibility and reputation on reforming the country. has he bitten off more than he can chew? megan: that is the key question. peter: there is no doubt that the crown prince, the heir apparent wanted to move out some

of his rivals, particularly the head of the national guard who was a favored son of the former king and posed a threat. the national guard was the only military branch that prince mohammed does not control. now he does. there was something else at work. it was billed as an anticorruption campaign, and i think there is some truth to that. there is no question that this prince is serious about transforming the economy. he wants to remove the layer of sinecure and handouts that has burdened the economy and sapped incentive for investment and entrepreneurship. he is doing two things at once here. julia: the thing that is unusual for the international audience to see, just a week after we had all of the big names in saudi arabia talking about how the country is going to be opening up and becoming more liberal at the same time as his massive

corruption crackdown. can those things be consistent? peter: that is a good question, and it goes to the paradox of this 32-year-old crown prince. he has only been in office for a couple of years. he is feeling his way. there is one thing i can tell you, having spent many hours with him last year in an interview, and he is absolutely certain of the path forward for himself. he is cocksure that he knows best for saudi society and is ready to pursue that. it is this dual track. it is imposing these reforms from on high, where he will tell the saudi people and try to create policies to promote entrepreneurship and say to them you have to go to work. we cannot survive on oil revenues. look at what has happened to the price. look at the budget deficits. at the same time, as you pointed out, he is doing things in an

oppressive manner like an autocrat. he is arresting people like the prince who is the so-called citicorp prints. he is in detention in his desert camp. carol: someone well-known to financial circles. i want to go back to the crown prince. he is playing to his base of people under 25. is that correct? peter: he has identified a constituency, so to speak. not that he needs one. he is an all-powerful prince. he has identified his constituency, and that is this youth in saudi society were about half of the population is under 25. many of them are well-educated or becoming well-educated. there is real frustration with job opportunities. there is an understanding and a desire to integrate with the

global values system in terms of the place of religion in society as well as things like climate change and other global concerns, so he is playing to that base. i think you shares some of those values. he certainly likes to talk about silicon valley and tech and identifies himself as a sort of steve jobs figure. carol: we discussed the cover image of the global issue. julia: everybody talking about saudi this week and the changes we saw in terms of crackdown and corruption. you chose a bold cover, the prince. >> we wanted an image that shows power and him contemplating his domain and where he is going to take the country. carol: where did you get that image? did he sit for you? >> this was a pickup. we went through a lot of options

and really wanted to find one where you connect with him in a way. julia: he is young. he is smiling. he is talking. to find one where he looks pretty fierce. you say it with words on the cover as well. this crackdown, you call it a revolution. >> this place nicely with the last cover we did with him, he was smiling and more jubilant and now he is taking a more serious tone. carol: i also thought the darkness of his clothing, it is ominous. >> we pushed the image of little -- a little bit. we wanted to feel, to play into the darkness of the photo. julia: the look on the photo as well. we do not know where this is going. carol: up next, amazon, apple, and google race to speak india's languages. having most important economy in africa came to benefit one powerful family. ♪

♪ julia: welcome back to "bloomberg businessweek." carol: you can find us online on businessweek.com. julia: u.s. tech companies are trying to differentiate themselves in india. carol: they are finding being on the subcontinent is king. >> amazon as well as google and apple have made a concerted effort to tailor their virtual assistants, whether it is syria -- siri or google assistant which powers the messaging app or the ecco, run by alexa, for a local market in india which is increasingly full of not only first-generation internet users but people learning to read for the first time. people who do not speak english as their first language and people who would rather talk to their computers than typing to

them. carol: it sounds like you in a world where more things are being individualized and customized that it makes sense that these virtual assistants would be more customized to the market they are selling into, but this is still an unusual move. >> the companies involved, particularly amazon, moving into germany a year ago. for the first time shipping these smart speakers to india in a real way and this is after they put in the effort to use linguists and speech scientists to help developers train it to among other things speak a blend of hindi and english which was challenging to develop for because it is a test that ai has not gone through before. blending two languages in a way that you can combine the spelling and grammar in each to create a third fusion that means

something different. carol: it is not just about getting an accent right, it is about understanding indian culture and holidays. it is all in by these tech companies. jeff: the big objective is to make systems that sound more inherently indian. whether that is having a particular accent or recognizing that independence day is august 15 and not july 4. wishing you happy to wally -- duwali. carol: one indian born family has come to wield incredible influence in south africa. julia: we talk about the group -- gupta family. >> these three brothers from a nondescript part of india immigrated to johannesburg, built something of a business empire with interests in mining

and information technology and the media, and in the process, it is alleged, have attained an incredible degree of political influence, both over the current president but also over a number of important ministers. the heads of state owned companies. what they are accused of doing with this influence is running the government for the benefit of their family. and really, it has created an incredibly severe crisis in south africa, by far the worst such crisis since the end of apartheid, and one that is shaking that society to its core. carol: i want to get to the impact on south africa because it is significant, but tell me about the trajectory of the gupta family within the south african government. is it the case of being in the right place at the right time? >> there is some of that, but it was that they came to south africa initially when the country was booming. it was opening to the world after years of international sanctions.

there was money to be made. introductions were made at opportune moments that allowed the eldest brother to make some powerful friends. one of them was jacob zuma, who, around 2005, emerged as a possible future president. what is interesting is that the gupta's rise coincided with a time 10 years after apartheid were the dominant local party was splintering. there was a moment where rather than being unified, the party was experiencing a schism. that was the moment when the guptas were able to apparently insert themselves and to befriend jacob zuma and become one of his key allies. carol: they are very smart on a lot of levels. they did hedge political bets and tie themselves to zuma, but

they also employed members of zuma's family before he became president, and that created some kind of relationship. >> that is correct. particularly president zuma's son is very closely associated with the guptas. he has become a director or shareholder in many companies in their orbit. he was hired in 2005 when he was in his early 20's. a very indicative detail is that he was involved in a very serious car accident that killed one commuter. his first call after the crash was to the youngest of the gupta brothers rather than to anyone else. that tells you how close he is to that family. i should stress that the family denied all of these claims. they say they are merely businessmen who are not engaged in politics, or not lobbyists, arrangements with the government.

since these allegations have not been proven in court, they have not been charged with any crime. what emerges is a picture of savvy operators. three men who understood that they were operating in a fluid system. south africa is a place that had a new government where the critical officials are former guerrilla fighters. there is not a long tradition of democratic governance. if you are a political entrepreneur, if you like, and you do have some money and skill to deploy, you can get quite far quite quickly. julia: up next, why cloud coders are so excited about an application coming out of google. >> from travel to watches to exercise, the best gifts for this holiday season. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." julia: you can listen to us on the radio on sirius xm, 1130 am in new york, am 1330 in boston, and am 960 in the bay area. carol: and in london and in asia on the bloomberg radio plus app. julia: a look at something for geeks. carol: this makes it easier to store code on the cloud. >> a huge deal for all of us. >> i think a lot of the advancements that have been made in terms of the chip industry and the hardware and the evolution of software, there is a disconnect between those things and frameworks were built for specific hardware. you have these big gaps, certain

kinds of security holes and bugs. you have another company that works on containers that solves a lot of these inefficiencies and pushed software forward. a reason you are having these big pushes towards cloud computing, aws with amazon and google and alibaba, they are building these colossal businesses. all of them say this is very early, there are still a lot more businesses that could use on demand and on center storage. this is one way you can test the cloud. you can use some of these containers with some of your data, store that on the cloud but keep core data on your premises, which is what a lot of companies want to do for security reasons. carol: it is a little complicated but for something like philip, for their app, it may been able to turn on their lights faster. >> in software, time is money.

if they can reduce something like a three second lag, it may sound trivial, but for the engineering team, that is a big change. they did not tell me basically what cost savings, savings but they hinted that it does reduce a lot of the costs they put into previously maintaining and running the software. you have a lot of companies like phillips, which is over a hundred years old, trying to keep up with the times and modernize and connect all the devices to the internet. in order to do that securely and in order to do that efficiently, you have to have the latest cutting-edge software tools. carol: now to something really exciting. the annual gift guide. >> it is not always easy to think of your friends as, this is a guy, this is a girl, this is a kid, this is an adult. we break it up to travel, you have an active family member, if you have a fashionista in your life.

we tried to break it down to what people like and care about. carol: let's talk about travel and adventure because there are cool items. >> one of my favorite things that we have is a simple idea. it is $99 and it is a beautiful map of the world or you can get a map of america. it is for families that want to keep track of where they have traveled in the world. it is a vintage looking map and you just put a pin where you have been. carol: also great headphones, you include something with that? mark: we also have these headphones made by a company called adle. handstitched leather. it is a little fancy. someone might not know that you have high-tech headphones on but you will know. carol: do they make good sound? mark: they have great sound. it is good for tuning out the

world and keeping to yourself. carol: you also include a skin vitality treatment for people into travel adventure. mark: masks are such a thing now. men, women, teenagers love wearing masks. that particular mask is a popular one, and it comes in four stages. when you get off of the plane and you feel like somebody slapped you, you are tired and dehydrated. it pumps it up for you. carol: the thing i definitely want is the shirling eye mask. it goes for $500. >> they are adorable. you know how some butterflies or moths have eyes on their wings to fool predators? fendi has adopted that into masks.

>> bloomberg businessweek is available on newsstands now. >> heavy on taxation, but we were looking at what was going on among u.s. lawmakers as tax reform works its way through congress. a deep dive into the history of taxes. a reminder that taxes were first thought about to increase revenue. they have become such a political football. great story and great information. julia: we go lost in the process. saudi arabia. what an incredible story. the week prior was about reform. this week the crackdown on corruption and the consolidation of power for the crown prince. what does this mean when it involves a billionaire businessman in saudi arabia but -- that everybody outside the country knows so well?

carol: well known for audience and it is just beginning. julia: bloomberg television continues now. ♪ qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates or employees. >> the following is an important a program about humana medicare advantage prescription drug plan. >> welcome to "your medicare, your decision," the program that guides you through the medicare options available from humana. there are many different medicare choices available today. but are you sure you have the right medicare plan? are you with the right company? do you wonder if you could save money with a different plan? no matter what medicare coverage you have now, this program will give you the information and facts you need so yocama