This NBA Playoffs with FanDuel, you're not just watching the playoffs, you're a part of them. Steve's got the phone, opens FanDuel, and he's going for threes! Be a part of the action on FanDuel. All customers get a profit boost every NBA Playoff game day. 21 plus and present in Maryland. Opt in required. Bonus issued as non-withdrawable profit boost tokens. Restriction supply, including any token expiration and max wager amount. See full terms at fanduel.com slash sportsbook. gambling problem, getting help is your best bet. Please play responsibly for help. Visit mdgamblinghelp.org or call 1-800-GAMBLER. Good morning for Daily Show, I'm Neil Freiman and I'm Toby Howell. Today, why sneaking by the IRS has never been easier than United is eyeing this airline for a potential mega merger. It's Wednesday, April 15th. Let's ride. Good morning. Crazy weather we've been having lately, huh? Pretty hot. I hear it's going to stay like this until Friday. Neil, what? This is the most boring start to a conversation ever. Sorry, sorry. I'm just making small talk because new research shows it's not as bad as we all think. A study published in the Journal of Personality and Social Psychology found that people enjoyed talking about nothing way more than they expected going in. And if you avoid small talk, which we all seem to do, it can come at a significant cost to your mental health relationships and mood. The Michigan PhD candidate who ran the study said, people underestimate how interesting and enjoyable conversations about boring topics will actually be. So morning brew is having a company on site right now, which has led to a lot of mingling with people you don't normally see. And this article is correct. It has been fun riffing about nothing. Here's another perspective that hopefully will have you embracing small talk. Gillian Sandsram, who's a professor of psychology in England said, if we don't practice talking to strangers, how are we going to make friends? How are we going to do on dates and do well in a job interview? So treat every low stakes interaction with people you don't know very well as a practice ground for the conversations that do matter. But you are right, Neil. It has been unseasonably warm. The weather is quite crazy. Okay, this episode is brought to you by on investing, an original podcast from Charles Schwab. Each week host Liz Ann Sander, Schwab's chief investment strategist and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights into what's happening in the markets and why and what the implications might be for your portfolio. Join Colin and Liz Ann as they explore questions like how do you evaluate corporate bonds that look interesting and what sectors are on the move right now? You can download the latest episode and subscribe at Schwab.com slash on investing or wherever you get your podcasts. Happy tax day to all who celebrate individual tax returns are due today, but not worried about you guys. I know you're a wholesome proactive bunch who always meets their deadlines. But if you are trying to slip something by the IRS, your chances haven't been this good in years. As the Wall Street Journal reports, the Trump administration has been scaling back tax enforcement, canning auditors and investigators who hunt down tax cheats and collect unpaid bills. Perhaps there's no agency that's been dojified more than the Internal Revenue Service. In the past year, the IRS has lost 27% of its workforce and about three quarters of its senior leadership, according to Brookings. Speaking of leadership, there's been more turnover than a retail space in a college town. The IRS has gone through seven commissioners and the current leader is doing it part time. He's also heading up social security. It all amounts to a reduced focus on enforcement and revenue for the federal government. Inflation adjusted spending on tax enforcement is the lowest in at least two decades, says the Progressive Center on Budget and Policy Priorities. As a result, audits of people with at least $10 million are projected to drop 39% this year, after falling 9% the year before that. In fiscal 2025, the IRS collected less direct revenue from audits and appeals than in any year since at least 2012 per the journal. Toby, there's never been a better time to tell the IRS catch me if you can. Yeah, Trump does not like the IRS. He has his own personal history with it after they audited him. And then also a lot of IRS people have just been reassigned to different parts of the government as it was sort of dojified. More people were going towards immigration enforcement rather than actually doing tax enforcement. So what happens though, when you gut the IRS, you collect less money as a country. So according to a Yale budget lab analysis, the cuts to the workforce for the IRS saved an estimated $46 billion in federal spending. But the fact that we have less enforcement when it comes to collecting taxes, that means it has reduced revenue collections by $643 billion. These are just projections. So when you take in less money as a country, obviously your budget is going to suffer because of that. So it is interesting to see maybe in the short term, you save a little money by reducing the size of the IRS, but in the long term, you're going to collect a lot less tax. And $861 billion whole. Here's what the Trump administration is saying. They want to shrink the federal workforce across the board and the IRS chief executive Fran Bizagnato told a congressional committee that look, we can do more with less. We are going to put AI and technology first here. And we think that will be better, more efficient outcomes going forward when it comes to tax enforcement. Actually, when you look at the actual audits, it still seems like the IRS is doing at least some of them toward large corporations. The IRS initiated more audits of large companies last year than in 2024. They've opened even more criminal investigations into identity theft and money laundering. So they're coming from a place of, we don't need as many humans to do this. Opponents say, yes, you actually do need humans with long standing know how and to work with tax lawyers who have, who want people to have this experience. And let's be clear. For the most part, you and I and normal Americans do pay their taxes. Taxpayers as a group pay 85% of what they owe as they file when they're doing their returns. That climbs up to 87% after audits in collections. So again, that is pretty good. If we ever got to a hundred percent rate, that would usually require a level of government intrusion into your private life that most Americans will not stand for. So again, these cuts don't affect everyone equally though. Wage earners are much more likely to pay what they owe because they have W2s. Like it's very easy to audit them. Business owners, on the other hand, can get a little fast and loose with the rules, a little extra zero here, take a zero away there. That is how you dodge taxes. I'm not giving a playbook by any stretch right now. But again, wage earners pay their taxes. Business owners get a little bit fast and loose with their, you know, depreciation sometimes. And that has led to a pretty yawning tax gap, which is the difference between taxes owed and paid. I know you're plotting our fellow Americans, 85% are paying their taxes, but that 15% leads to a pretty big number. The former IRS commissioner said it was approaching this tax gap was approaching $1 trillion a year from the taxes owed to the taxes paid. Moving on, two of the biggest airlines in the world might be joining forces like Beyond Sun and Ambrose and kicking and screaming. United Airlines is floating the idea of merging with American Airlines, talking to senior government officials about the tie up, according to Bloomberg. It would be a bigger merger than when you veered in from the emergency lane just before the airport exit. Their combined fleet would number over 2800 aircraft. Their combined revenue would top $100 billion. And it would bring more than a third of the entire US airline market under one carrier. That is, of course, if antitrust regulators can stomach numbers like that. A merger of the second and third largest US carriers by revenue would face huge opposition from smaller rivals as well as some on Capitol Hill. They would need to get the green light from both the transportation department and the DOJ before proceeding. But unlike your acts, the current administration is at least open to the conversation. Transportation secretary Sean Duffy told CNBC earlier this month that President Trump loves to see big deals happen and there s room for some mergers in aviation. Neil, we ve talked about airline mergers before on this show, most recently between JetBlue and Spirit, which failed. But this one would be much, much bigger. In 2016, and by all accounts, he s done a much better job at leading United than the folks who have been leading American have. United has a market value of about $31 billion. American Airlines has a market value of just $7.4 billion, which is setting the table for Kirby to maybe lead American once again. Yeah, a lot of missteps have been made at American over the past, you know, couple of the past decade really. American tried to go and compete with Spirit Airlines, with Frontier Airlines. They tried to compete on price, better than compete on, you know, the luxury side of things, which is what has been driving most of the industry right now. So they made decisions like removing premium seats from planes, closing some of their airline clubs, removing the screens from seatbacks. These are all decisions that maybe at the time seemed present because they wanted to be an affordable airline, but the airline industry has gone in the complete opposite direction, which does make it right for a potential merger. All right, let's talk about whether this merger is going to actually happen. Because when we first saw this news, we were like, how is this possible? I mean, the government blocked JetBlue from taking over Spirit, and now it might let United take over American. I mean, there's only four major airlines in the country. So this would shrink it to three. Wouldn't this drive up prices for consumers reduced competition? The answer is maybe probably, which is why, you know, these United executives, it's not even reported that they talked to American. The first people that they talked to was they went straight to the White House, and it's reported that they even talked to President Trump because he is going to need to bless this deal. So huge antitrust questions, whether United decides to pursue American, the airline industry has faced a lot of antitrust concerns just because there's so many barriers to get into this industry. You and I just can't make a plane, get all these slots at airports. So there's not that many players, and we'll see what the government has to say. Yeah, remember though, the US industry, as we know it, has been built largely through consolidation. I mean, Delta merged with Northwest Airlines. You don't even remember Northwest Airlines United and Continental Merge American US Airways. These are the bedrock of the modern industry, but now you are right. Like if JetBlue can't get it done with Spirit, how would you know, American is the biggest carrier in the world by just total number of flights. So it sounds crazy on the surface. The one angle that United was apparently floating to the Trump administration was that this type would help carriers compete on international routes. He previously has talked about how the fact that two thirds of long haul seats to and from the US are often by foreign airlines. So maybe that's the tack that he's bringing to the administration saying like, Hey, we need to beef up our domestic long haul operations. This is one way to do it. Yeah. So I mean, American Airlines, you don't think about it that much, but it is, it is the biggest airline in the United States as far as like just taking passengers, the most planes, the most routes, et cetera. So that's why United is make it. That's why it's an attractive target for United. When they lost my bags the other week, I can tell you what I was thinking a lot about American Airlines. Okay, let's move on. You know that meme where the room is on fire, but the dog is sitting there thinking, this is fine. Well, that's the US economy. In their earnings reports yesterday, major American banks said that US consumers and businesses are doing just fine, even amid a global energy crisis from the Middle East. The three banks, JP Morgan, Wells Fargo and Citi brought in a collective $27.5 billion in profits in Q1, a 17% bump from a year earlier. Jamie Dimon, CEO of the country's largest bank, JP Morgan, said that the US economy remained resilient in the quarter with consumers still earning and spending and businesses still healthy. Spending volume on JP Morgan's credit cards rose 9% from the previous year. While the liquid rates on consumer loans like mortgages fell, Wells Fargo flagged that consumers were spending about 25 to 30% more on fuel than before the war. But the CFO said, quote, overall spend continues to be quite resilient and quite strong. The road ahead could be however, and fraught with potential danger. Dimon wrote, at the same time, there is an increasingly complex set of risks such as geopolitical tensions and wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices that could derail the strong economy. Overall, it's only banks are doing well. And as the makers of the plastic people use to pay for things every day, they say, we're doing well also. Yeah, it was a very interesting earnings season for banks because on the one hand, they are trying to paint this very complex picture of the economy and say a lot of risks abound. But then they look at the actual details. It's literally like putting a thermometer in the consumer's mouth and they're saying they're reading. All right, they are reading pretty healthy right now because when you look at where consumers are talking with their wallets, they are still spending, you know, delinquency rates aren't jacking up anywhere. So it was this kind of awkward trying to straddle the line between saying like, Hey, we know there's a ton of risks everywhere else. But right now from what we're seeing, or at least what we were seeing over the past quarter, things are looking pretty hunky. Yeah, we haven't really talked about talked about the stock market recently, but it is also responding to maybe these banks saying that yeah, we know that the world is maybe on fire, but US economy is doing pretty well. The S&P 500 is now less than 1% from its all time high. It's had nine positive sessions in its last 10, while the technology heavy Nasdaq has gone 10 straight consecutive gains in the green. It seems like there are overtures that Trump and Iran are talking that the war could wind down and then you have JPMorgan Wells Fargo city coming out saying, yeah, people are spending like it's fun. Yeah, gas is a little more expensive, but people are still going out and travel. The curmudgeon in the room though is the international monetary fund, the IMF. I know it's always the dang IMF. They are basically saying that the world economy has been upended by the Middle East. They are slashing their growth forecast in their latest world economic outlook report. 2026 forecast is now the global economy to grow 3.1%. That is down from 3.4% in 2025. So basically they're saying the most severe cases at the energy markets continue to be in turmoil. Global growth drags all the way down to 2% inflation jumps up to 6%. So they are talking about the downside risks much bigger than a lot of other people are kind of forecasting. So even the US economy, which we've just talked about, they say that we're not immune to the energy crisis. So there are conflicting signals everywhere you look. You can look at bank earnings and see a rosier picture of the economy or you can look at the IMF who is not pumped about what they're seeing. All right, we're going to take a quick break and come back with a story about gummies right after this. I hear we're talking about acting today. No, we're talking about Tax Act. And why did I bring a skull? I have no idea. But the reason we're talking about Tax Act is they help small business owners get their taxes done. They make it easy by providing the only online DIY filing software for small businesses. With Tax Act, you can file your business taxes any way you'd like, whether that's by yourself or an expert can prepare and file for you. Just head to taxact.com slash business-returns to get started. That's taxact.com slash business-returns. Neil, are you risk averse? Yes, it's why I won't even get into bathtub if there's not a lifeguard on duty. Then you are just like most customers who now expect proof of security just to do business. Enter Vanta. Vanta automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a SOC2 or running an enterprise GRC program, Vanta keeps you secure and keeps your deals moving. Get $1,000 of Vanta today by going to Vanta.com slash morning brew. That's Vanta.com slash morning brew. Marketing your brand these days probably feels harder than finding a good avocado at the grocery store at 5 p.m. Lucky for you, Instacart built a one-stop shop for grocery retail media across more than 2,200 retail banners to help you reach all sorts of high-intent consumers. Instacart's ad platform covers the entire shopping journey and it's all backed by real-time optimization and closed-loop reporting. Keep your brand top of mind and top of the grocery list with Instacart. Hit the check out with Instacart at ads.instacart.com. That's ads.instacart.com. Neil, everyone's high on gummies. Not those kind of gummies. Get your head out of the gutter. The wellness crowd is all in on healthy supplements in gummy form. Grooze is probably the poster child for this gummy craze. Started three years ago. They just sold to Unilever for over a billion dollars as the big CPG giant tries to capitalize on the nutrition trend desgeur. What benefit do Grooze actually provide? Especially a normal multivitamin that your parents always stored in the kitchen cupboard. 21 vitamins and minerals, 6 grams of fiber, but the form factor is cute green gummy bears. It feels like you're having candy for breakfast. It's fun, it's novel, it's cute, and it doesn't feel as clinical. Nate Rosen, a CPG writer told Bloomberg. Grooze also promises all sorts of vague benefits, like their website boasting that 67% of users say their overall health and well-being has improved. It's all a little hand-wavy because it can be. Supplements are a far less regulated industry than pharma, which means they are far easier for influencers to sell, which they do in droves. The US supplement market reached 69 billion dollars in 2024 and is expected to balloon to 87 billion by 2028, according to a nutrition business journal industry reports. Neil, it is gummy mania out there. You know who doesn't need a gummy to feel good right now? Chad Janis. I mean, this guy, so he's the founder of Grooze and this is one of the wildest CPG exits we have seen in years. He started it as a Stanford MBA candidate and he was just super sick of mixing powders and juices to get those supplements kind of like you before the show. So he decided to create this gummy and he first hit the market in August 2023 as a direct to consumer gummy product and then he just barnstormed the entire retail landscape. So they're already crushing it on Amazon and then they get into Walmart, Costco, all these other grocery stores, Sprouts was their first biggest retail partner. Then all of a sudden they go to Unilever and sell for 1.2 billion dollars in less than three years. It's a crazy story. Don't expose me for mixing all my patterns and stuff in the morning. No one that stays between us and the MBD team, but you are right. The industry as a whole is embracing this category with open arms. I look at Unilever who just sold their big food business to Spicemaker McCormick in a $44 billion deal. The main star of that show was Hellman's, which is mayonnaise. Now here they are splashing out a billion dollars on Grooze, which is a supplement. You can see the thought process in that alone. Would you rather have a household staple that grew at a meager 0.4% in the last year or would you want to move into the supplement category specifically gummies which grew 4.7% over the same period? That right there is the state of the industry. You can't ignore the social media of it all. Whenever we do, we talk about a super hype product or a super hype segment, especially in health and wellness. You can draw a direct line to influencers on social media, TikTok shops, US sales. Almost 80% of them last year were health and beauty related. These little green gummy bears just work so well on social media. They're visual. You can watch people eat them. People talk about them. They don't have to be FDA approved. So just the TikTok to $1.2 billion exit pipeline is very strong. Yeah. And the final factor here is the GLP ones because GLP ones are hurting the packaged food industry as a whole, but they are helping the supplement industry because as you eat less, you want to fill some of those nutritional gaps that you are seeing in your diet. And one thing that grooms did very well is they hyped up their fiber offerings. Each serving of grooms comes with six grams of fiber. And remember, we've talked about how GLP one users don't get enough fiber. They don't get enough of some of the essential ingredients that they need. So just kind of the right product at the right time, powered by the right social media trends, grooms is crushing. We should start a gummy company. No, we should not. Okay. All right. Let's let's be honest. We never know. Okay. Let's sprint to the finish with some final headlines. The presumed next Fed share is very, very rich ahead of his confirmation hearing next week. Kevin Warsh disclosed his finances and they are shockingly robust. His assets total more than $130 million, which will make him by far the wealthiest Fed boss of all time. So where to wash get all of this money. He has a lot of investments, including stakes in SpaceX, Polymarket and dozens of other startups. His advice seems to be in demand, having booked $13 million in consulting fees last year alone. And he charges a pretty penny for sharing his wisdom with the crowds netting $1.5 million for speaking engagements. Not that he needs any of this. Warsh is married to Jane Lauder, an heir of Estee Lauder, but affording a PJ doesn't automatically make you the Fed share. Warsh's nomination has been complicated by the DOJ's investigation of current chair Jerome Powell and key senators will not vote on his candidacy until that power probe is wrapped up. Speaking of Powell, not to use modern language, but he has been mocked by Warsh here because when Powell was confirmed in 2018, he was thought to be the wealthiest Fed share in history with a net worth between $19 million and $75 million. Warsh is in order of magnitude above that. Warsh too is a pretty influential figure in corporate America. He has board positions at UPS at coupang, which is a online retailer. So he is very well connected in corporate America has made a lot of money over time. Again, a lot of this would be divested if he is eventually confirmed, but it was funny to see Powell was like the rich guy who became Fed share. And now like the person who's replacing him is ever richer. All right, moving on. Amazon is stepping into the arena to compete with SpaceX and the arena is space. Yesterday, the company announced it's buying the satellite operator global star in a $10.8 billion deal. The deal beats up Amazon's Leo satellite venture, which has been trying to chip away at SpaceX's Starlink domination of the skies. Global star runs a fleet of satellites owning a juicy chunk of the so-called spectrum resources, AKA the wireless airwaves that beam the internet to your phone. You likely have been using global star without even knowing it. They're the reason your iPhone can send an emergency text if you're out of cell range while hiking in the woods. Thanks to a deal they've struck with Apple. Amazon has a long way to go though before it can go toe to toe with Elon's operation. Starlink already has roughly 10,000 satellites and orbits with 650 dedicated to connecting directly to cell phones. Amazon has launched just over 200 satellites so far and won't start deploying its direct to phone fleet until 2028. I don't know much to add to that Toby, but all I'll say is that global star sounds like a company in a movie. It sounds like Globo gym. I was like, wow, like good man, you got paid man. But yes, global star real company. I thought it was fictional and Amazon's trying to take on Starlink. Okay, finally, let's wrap up the show with suggestion box, our new Wednesday segment where Toby and I each recommend something that's improved our lives in the hope that you'll find it useful as well. Toby, what wreck do you have for MBD listeners today? My recommendation is something called Miss Ogy. It's a Japanese term that I first heard about from Jesse Itzler. Now Sean Puri, who hosts my first million has adopted it. Basically, Miss Ogy is you do one hard year defining thing within a calendar year. So for Sean, he went from never knowing how to play piano to playing a concerto in a one year. He gathered all his friends and surprised them by playing beautifully, but it can really be anything. And the idea is you do one thing that defines your year. So when you look back at 2026, you can say, Hey, I finally launched that podcast. 2027, I ran that marathon. So it's one big year defining thing your miso is it a calendar year? Yeah, calendar year, but I mean, you can start now, you can go school year to school year to school year to start thinking about what you want to be your year defining thing in 2026. All right, well, my thinking about it is going to be that. Okay, my, my recommendation is the app flight radar 24. All you aviation freaks out there nodding your heads, you know, flight radar, but for the uninitiated is incredible flight tracking app that shows you where every single plane in the world is at all times. You can use it for practical purposes, like say you're at your gate at the airport, but your plane isn't there yet. Flight radar will show you where it is and when it's due to arrive for peace of mind, but you can also use it for pure enjoyment. For example, if you're outside and see a plane go by, you can fire up the app to see where it's coming from and where it's going. Toby, this is one app I cannot live without. You are on it more than you need to be. Let's be honest. Like sometimes your brother is taking a flight. You just will just check in. You're like, Oh, it's over the, you know, Atlanta, ocean right now. But the first time you busted out the AR feature, my mind was blown because I actually said, wouldn't it be cool if you could point your phone at the sky and see like what that plane is? And you go flight radar, I actually does that and you did it for me. And there are lots of planes flying above you at all time. So yes, it is cool for even the non aviation nerds out there. I highly recommend. And also it kind of goes viral every single time there's a war going on and there, uh, there's airspace closed and you can see this, the patterns of the planes going around. And another time that people use flight radar 24 is when there's maybe a free agency or a head coaching vacancy and sports and everyone's tracking the private jets going from, you know, rent like Bloomington, Indiana to Baton Rouge to see who's going to be the next coach of LSU. So it's either a war breaks out or the LSU job. It's a versatile app. Okay. This is all the time we have. Thanks for starting your morning with us and have a wonderful Wednesday. We really appreciate everyone who voted for MBD and the Webby Awards. Thanks to you. We have stormed back and now holding an 18 point lead over Kara Swisher and Scott Galloway, but we watched enough football collapses to know you cannot switch to prevent defense. So if you haven't voted yet, you can today, which is the last day to do so. And if you'd like to reach us, send an email to morningbrewdaily at morningbrew.com or DM us on Instagram at MB Daily show. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Lute is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake. Hair and makeup still hates making small talk. Devon Emery is our president and our show is a production of Morning Brew. Great show, Daniel. Let's run it back tomorrow.
