Missing taxes, spiking copper and Napster's re-re-rebirth

Summary

Podcast Summary: "Missing taxes, spiking copper and Napster's re-re-rebirth"

Podcast: The Indicator from Planet Money
Host/Author: NPR
Episode Title: Missing taxes, spiking copper and Napster's re-re-rebirth
Release Date: March 28, 2025

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Introduction

In this episode of The Indicator from Planet Money, hosts Darren Woods and Keith Roemer, joined by producer Angel Carreras, delve into three significant topics impacting the economy: the alarming drop in IRS tax revenue, the surge in copper prices, and the unexpected resurgence of Napster in the modern digital landscape.

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1. The $500 Billion Tax Revenue Shortfall

Overview:
The episode begins with an exploration of the substantial decline in expected tax revenues for the current year. The IRS anticipates a shortfall of approximately $500 billion compared to the previous year, a figure that has raised concerns among government officials and economists alike.

Key Points:

• Budget Cuts and Staffing Reductions:
  The primary driver of this revenue gap is the recent $20 billion reduction in the IRS operating budget, as enacted by Congress. This financial constraint has necessitated significant layoffs, particularly within the tax compliance department. The Department of Government Efficiency has requested over a 20% reduction in IRS staff over the coming months, with potential for further cuts.

  Darren Woods [02:13]: "So my indicator is roughly $500 billion. That is the drop in tax revenue that the IRS is expecting this year. Compared to last year half trillion dollars."

• Decreased Enforcement and Increased Evasion:
  With fewer resources, the IRS has scaled back its enforcement efforts, ceasing investigations into certain corporations and wealthy individuals. This reduction in oversight is expected to lead to increased tax evasion.

  Darren Woods [02:24]: "It is even for the government and it appears to be at least partly because of cuts to the IRS itself..."

• Public Perception and Behavioral Changes:
  There's a growing sentiment among taxpayers that enforcement of tax laws is waning. This perception, coupled with staff cuts, may embolden some individuals and businesses to underreport income or exploit deductions.

  Angel Carreras [03:12]: "So the signal to would be tax evaders is they're less likely to get caught."

• Broader Economic Factors:
  Additional factors contributing to the revenue shortfall include natural disasters like the LA wildfires, which have disrupted economic activity, and uncertainties in the financial landscape leading individuals to delay tax filings. Moreover, discussions between Immigration and Customs Enforcement (ICE) and the IRS about sharing information on undocumented individuals may discourage tax filing among this demographic.

  Darren Woods [03:43]: "...Immigration and Customs Enforcement is currently in discussions with the IRS about sharing names and addresses for people without legal status."

Implications:
The anticipated $500 billion shortfall significantly impacts the government's fiscal health, potentially exacerbating deficits and limiting the ability to fund public services. The reduction in IRS enforcement may also lead to a broader erosion of tax compliance, undermining the overall tax system's integrity.

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2. Copper Prices Hit Record Highs Amid Tariff Fears

Overview:
The podcast transitions to the soaring prices of copper, which have reached an unprecedented $5.37 per pound. This surge is attributed to a combination of heightened demand and looming tariff threats.

Key Points:

• Supply and Demand Dynamics:
  Copper is a critical commodity for various industries, including construction and technology. Its use in plumbing and as a conductor in electrical cables makes it indispensable, especially with the rapid expansion of AI data centers requiring extensive wiring.

  Keith Roemer [04:39]: "No, Darian, you cannot. And copper prices have been doing things. On Tuesday, copper futures hit a record high. $5.37 a pound."

• Tariff Announcements and Market Reactions:
  The immediate catalyst for the price spike is the prospect of President Trump imposing a 25% tariff on copper imports. The administration has cited national security concerns as a potential justification for these tariffs, prompting anticipatory buying.

  Keith Roemer [06:10]: "President Trump has talked about imposing a 25% tariff on copper."

• Global Supply Considerations:
  The majority of U.S. copper imports come from Chile, with smaller quantities sourced from Canada and Peru. The anticipation of tariffs has led businesses to stock up on copper, feeding into the demand surge and driving prices higher.

  Darren Woods [06:52]: "So a lot of demand, which is pushing up prices."

• Economic Impact:
  The 30% increase in copper prices since the beginning of the year reflects both sustained demand and speculative buying ahead of potential tariffs. Higher copper costs can ripple through various sectors, increasing construction costs and affecting the pricing of electronic goods.

  Keith Roemer [06:55]: "Most of our copper imports come from Chile, with smaller amounts from Canada and Peru. Copper prices have increased around 30% since the beginning of the year."

Implications:
The sharp rise in copper prices underscores the volatility in commodity markets, especially in response to geopolitical actions like tariff implementations. Businesses reliant on copper may face increased operational costs, which could translate to higher prices for consumers and potentially dampen economic growth in affected industries.

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3. Napster's Unexpected Rebirth in the Metaverse

Overview:
The final segment of the episode delves into the revival of Napster, the once-controversial peer-to-peer file-sharing service that played a pivotal role in transforming the music industry.

Key Points:

• Historical Context:
  Napster originally gained fame in 1999 by enabling users to download and share MP3s, revolutionizing music consumption. However, legal challenges from record labels and artists like Metallica led to its initial downfall.

  Angel Carreras [08:12]: "Yeah, so Napster took a dirt nap of sorts in the early 2000s after getting sued into oblivion by said record labels and James Hetfield's Metallica."

• Acquisition Journey:
  Over the years, Napster changed hands multiple times, facing bankruptcy, transitions to subscription models, acquisitions by Best Buy, and integrations with streaming services and blockchain firms.

  Angel Carreras [09:22]: "Napster's been like sticking around for a couple decades because they've been hot potatoed a bunch...and this week, finally Infinite Reality bought the vestiges of the Napster brand."

• Infinite Reality's Vision:
  The latest acquisition by Infinite Reality, a metaverse-focused startup, aims to reinvent Napster as a platform for virtual 3D music experiences. This includes hosting virtual concerts where fans can engage without the physical limitations of traditional venues.

  Angel Carreras [09:50]: "Infinite Reality wants to build on Napster's old brand recognition and dive into new media...create virtual 3D spaces that will allow fans to attend concerts."

• Cultural and Economic Impact:
  Napster's re-emergence in the metaverse symbolizes the intersection of nostalgia and technological innovation. By leveraging virtual reality, Napster seeks to offer immersive musical experiences, potentially reshaping how artists and fans interact in the digital age.

  Keith Roemer [10:08]: "Darren, you can go see Ramstein in the Metaverse."

Implications:
Napster's resurrection highlights the enduring value of iconic brands and their ability to adapt to evolving technological landscapes. If successful, this move could set a precedent for other legacy services to explore virtual and augmented reality platforms, fostering new forms of content consumption and engagement.

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Conclusion

This episode of The Indicator from Planet Money provides a comprehensive analysis of three distinct yet impactful economic phenomena. From the looming fiscal challenges posed by a significant tax revenue shortfall to the dynamic fluctuations in commodity markets influenced by policy changes, and finally, the innovative rebirth of a pioneering digital platform in the metaverse, the discussion offers valuable insights into the complexities of today's economic landscape.

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Notable Quotes:

• Darren Woods [02:13]: "So my indicator is roughly $500 billion. That is the drop in tax revenue that the IRS is expecting this year. Compared to last year half trillion dollars."

• Keith Roemer [04:39]: "No, Darian, you cannot. And copper prices have been doing things. On Tuesday, copper futures hit a record high. $5.37 a pound."

• Angel Carreras [09:50]: "Infinite Reality wants to build on Napster's old brand recognition and dive into new media...create virtual 3D spaces that will allow fans to attend concerts."

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Production Credits:

This episode was produced by Julia Ritchie, with engineering by Jimmy Keeley. Fact-checking was conducted by Cooper Katz McKim, and Kate Concannon served as the editor. The Indicator is a production of NPR.

Transcript

[NPR]

Npr.

[Darren Woods]

This is the Indicator from Planet Money. I'm Darren Woods. I'm joined today by our very own producer, Angel Carreras. Welcome Angel.

[Angel Carreras]

Hello, Darian.

[Darren Woods]

And we also have Planet Money host Keith Roemer.

[Keith Roemer]

I'm ready to indicate.

[Darren Woods]

So you guys are joining me for indicators of the week. Yippee.

[Angel Carreras]

Woo.

[Darren Woods]

This is our weekly look into the most insightful night. Welcome back to Numbers from the News. Today we're looking at what's making an enormous hole in government's finances this tax season. The gigantic price rise of copper and the miraculous rebirth of Napster.

[NPR]

Support for this podcast and the following message come from Spectrum Business. Whether it's the shoe design studio one couple runs in North Carolina or or the fast growing tutoring company based in Los Angeles, no two businesses are the same. But there are things that help businesses of all sizes run smoothly like fast, reliable Internet, multi layer security and exceptional service. That's why Spectrum is committed to delivering connectivity solutions for businesses of any size and will help create a plan that's right for you whether your business is big or small. The Spectrum commitment is the same, providing reliable connectivity, exceptional service and local teams who are there when you need them. And they're committed to helping business owners save with flexible pricing. Learn [e-mail] business restrictions apply services not available in all areas. This message comes from Charles Schwab. When it comes to managing your wealth, Schwab gives you more choices like full service, wealth management and advice when you need it. You you can also invest on your own and trade on thinkorswim. Visit schwab.com to learn more. This message comes from NPR sponsor Shopify. Start selling with Shopify today. Whether you're a garage entrepreneur or IPO ready, Shopify is the only tool you need to start, run and grow your business without the struggle. Go to shopify.com NPR Indicators of the.

[Angel Carreras]

Week Darian, what's yours?

[Darren Woods]

So my indicator is roughly $500 billion. That is the drop in tax revenue that the IRS is expecting this year. Comp to last year half trillion dollars.

[Keith Roemer]

That seems like a lot.

[Darren Woods]

It is even for the government and it appears to be at least partly because of cuts to the IRS itself. So recently Congress took away $20 billion from the IRS operating budget and the Washington Post reported that the IRS has stopped investigating some corporations and wealthy taxpayers because it needs to conserve its resources.

[Keith Roemer]

Now I am also going to be conserving my resources for the remainder of the podcast.

[Darren Woods]

Okay. And some of the other reasons for this is that there general sense from taxpayers that they're expecting less enforcement of tax rules. The Department of Government efficiency asked the IRS commissioner to cut more than 20% of staff over the next couple of months. The biggest area with layoffs will be in the tax compliance department, and there might be more cuts to come.

[Angel Carreras]

So the signal to would be tax evaders is they're less likely to get cut.

[Darren Woods]

Now, I think that's fair to say. With a lot fewer people on the job, some tax crimes will fall between the cracks. According to three anonymous sources who spoke with the Washington Post, they say the IRS is actually measuring the frequency of online conversations where people are publicly saying they're not going to pay taxes or claim deductions they're not entitled to.

[Angel Carreras]

And where is this?

[Darren Woods]

We're not sure, but presumably online platforms like Reddit or Facebook.

[Keith Roemer]

Definitely Reddit. There's a whole subreddit about this, I guarantee it.

[Darren Woods]

Now, the Treasury Department is the overarching department where the IRS sits and it is denying everything. In the Washington Post article, We did.

[Keith Roemer]

Not lose $500 billion.

[Darren Woods]

Yes. The black hole is not there. You can't see it. There are also some other reasons for the drop, like the LA wildfires and other natural disasters. Or as we reported this week, a lot of people are feeling uncertain about their financial situation, so they could be delaying their taxes. Also, Immigration and Customs Enforcement is currently in discussions with the IRS about sharing names and addresses for people without legal status. So that is likely to make fewer of them want to file taxes. But those factors alone should not add up to this gigantic $500 billion hole.

[Keith Roemer]

I mean, it's worth at least pointing out the irony that some of these Doge cuts. Right, might actually be putting the government further into the hole.

[Darren Woods]

Yes, and $500 billion would be a lot more than any savings found so far.

[Angel Carreras]

All right, so the IRS to the periodic table. Keith, what do you have for us for your indicator?

[Keith Roemer]

Okay, so this is a. I'm doing an indicator of the week throwback. Last week you talked about the price of gold. I want to keep the show, as you say, elementally focused. I'm going to stay in Group 11 on the periodic table.

[Angel Carreras]

Silver?

[Keith Roemer]

No.

[Darren Woods]

Roentgenium.

[Keith Roemer]

Solid. Poll, Darien. But no. Again, I am here to talk about.

[Angel Carreras]

What is that? What is runtginium?

[Darren Woods]

It's right below gold on the periodic table.

[Angel Carreras]

Folks, this is why I'm a producer. I don't know what that is.

[Keith Roemer]

Neither silver nor red. Ginium. I am here to talk about copper. Copper, Right. Hugely important to the economy. You need it for pipes it's also a great conductor, so you need it for electrical cables.

[Darren Woods]

Can't build all those giant AI data centers without a lot of electrical cables.

[Keith Roemer]

No, Darian, you cannot. And copper prices have been doing things. On Tuesday, copper futures hit a record high. $5.37 a pound. And that is my indicator.

[Darren Woods]

So with gold, part of the big jump in prices was about people wanting to buy something that feels like it will stay valuable even when the rest of the economy is in chaos.

[Angel Carreras]

So say the end of the world comes, the apocalypse is upon us. I mean, you could sew gold into the lining of your clothes and use it to buy fresh water from our waterlords. Correct?

[Keith Roemer]

Exactly. That is a standard argument for gold, Angel. But with copper, this jump in price is a reaction to, I guess you could say a narrower kind of chaos.

[Darren Woods]

Like the tariffs.

[Keith Roemer]

Correct. President Trump has talked about imposing a 25% tariff on copper. Last month, he asked the Commerce Department to investigate whether copper imports posed a risk to national security, which is one of the legal justifications for imposing a tariff. The timeline for one of these investigations can be like, nine months, but there is reporting out there that suggests this investigation might wrap up pretty quickly.

[Angel Carreras]

So people in the US Are trying to buy copper now before those tariffs kick in.

[Darren Woods]

So a lot of demand, which is pushing up prices.

[Keith Roemer]

Right. Most of our copper imports come from Chile, with smaller amounts from Canada and Peru. Copper prices have increased around 30% since the beginning of the year. Some of that just that ongoing increase in demand. You got to build all those data centers. But. But this recent big jump seems to be about people trying to get copper before tariffs start. And copper gets even more expensive.

[Darren Woods]

Speaking of interconnected data centers, we're going to have a throwback to Napster. Hit us, Angel.

[Angel Carreras]

Darian, I love being interconnected with you. Yes, my indicator of the week is 207 million buckaroos, because, baby, that's how much a certain peer to peer file sharing app is somehow worth in the year of our Lord 2025. Does anyone care to gander a guess as to what this app may be?

[Keith Roemer]

I know this. Darian said it in the intro to this section. I bet it's Napster.

[Angel Carreras]

You know, it really could have not have been Napster, but, you know. Great job, Keith. Thank you. Yes, the company that had a comet like existence arriving in 1999 to shake up how we consume music at the turn of the millennium. It is still in our zeitgeist and still getting several leases on life. It was sold to a metaverse Remember that startup company Infinite Reality? This past week they went to reimagine what's possible with music streaming.

[Darren Woods]

Okay, so let's do a quick recap of what Napster was doing all this time.

[Angel Carreras]

Yeah, so you see kids and listeners who are decent law abiding people. In the olden days, we'd buy full fledged albums at something called a record store. Napster allowed people to, you know, just Download and share MP3s of songs and full albums too, with just about anyone. That sounds great, but they were often pirated, AKA stolen. Sorry I sound like such a narc on my debut here. And that angered record labels and perhaps more terrifyingly, the band Metallica.

[Keith Roemer]

You don't have to be terrified of them. They did the whole. They went through therapy, they did a whole documentary about it. Metallica's nice now these days they're less.

[Darren Woods]

Cease and desist, more and more cease and chill.

[Angel Carreras]

I wonder what their attachment style was to having their music stolen. Avoidant. Anyways, so Napster took a dirt nap of sorts in the early 2000s after getting sued into oblivion by said record labels and James Hetfield's Metallica.

[Darren Woods]

It's informative. Years in front of a 28.8k modem downloading Rammstein, do I admit that? But that's.

[Keith Roemer]

You just did.

[Darren Woods]

Indeed. And so let's catch up with what happened after that. Like, clearly the brand didn't go away.

[Angel Carreras]

Yeah, you're right. Well, you know, Napster's been like sticking around for a couple decades because they've been hot potatoed a bunch, you know, they went bankrupt, then they got sold to a software, then they became a subscription model type thing. Then they got sold to Best Buy and then sold again to a streaming service and then bought by a VR company and then bought by a couple of blockchain firms. And this week, finally Infinite Reality bought the vestiges of the Napster brand.

[Keith Roemer]

It's like all of late capitalism in one company.

[Angel Carreras]

Yeah, and Infinite Reality wants to build on Napster's old brand recognition and dive into new media to do, you know, I guess among other things, create virtual 3D spaces that will allow fans to attend concerts. I guess that precludes someone from getting sweaty next to someone else. So I don't know. That sounds kind of good, I guess.

[Keith Roemer]

Darren, you can go see Ramstein in the Metaverse.

[Darren Woods]

The Misanthrope's dream. Hey, Indigator listeners, before we go, about a year ago we rebranded the show and we introduced a new mascot, Indy the Indigator. We launched merch to go along with it for Planet Money plus subscribers. And now we're opening it up to everybody. So go to shop.npr.org indicator to find T shirts, mugs and our plushie mascot. And also you can show your support for the show. This episode was produced by Julia Ritchie with engineering by Jimmy Keeley. It was fact checked by Cooper Katz McKim. Kate Concannon is our editor and the indicator is a production of NPR.

[NPR]

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