Maine Bans Large Data Centers in U.S. First

0:02In a world full of noise, long-term thinking stands out. On the Capital Ideas podcast, Capital Group leaders explore the decisions that matter most in investing, leadership, and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years. Listen to the Capital Ideas podcast from Capital Group, published by Capital Client Group, Inc.

0:32American allies start imagining a European NATO should President Trump exit the alliance. Plus, Maine becomes the first state to block construction of large AI data centers in a largely party-line vote opposed by many Republicans. This is all about jobs for me. It should be for all of us. And we'll look at why more Americans are preparing to cheat on their taxes after the Trump administration cut IRS enforcement staff. It's Wednesday, April 15th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

1:12NATO is accelerating a fallback plan to defend its member nations without the U.S. as tensions over the Iran war fuel anxiety over American reliability. That's as President Trump has restarted criticism of NATO since the war began, calling for alliance members to help secure the Strait of Hormuz. Though with Europe reticent to join the war, our chief European political correspondent, Bojan Panchevsky, says that leaders are now reluctantly planning for a future without U.S. security guarantees. America is the core of NATO's deterrence because the American nuclear umbrella is protecting most of Europe from basically Russia.

1:49And so they will never do anything to alienate Trump further. But what they're trying to do is make contingency plans of how to kind of take over NATO institutions within Europe, how to staff the top jobs with European officers, with generals and so on, how to move European assets and troops in the place of American assets and troops that are kind of slowly dissipating or have been announced for pullback. For now, there's no real solution as to what do you do when the American nuclear umbrella is no longer available, if that happens. So there have been some conversations with France and Britain who have independent nuclear deterrence.

2:30So they are kind of scrambling for solutions in all of these departments. And Bojan added that Europe's plan is gaining traction after getting buy-in from Germany, which had long been an opponent of a go-it-alone defense approach. The German Chancellor Friedrich Merz realized at one point that Trump is willing to potentially let Ukraine drop. Then came Greenland and Trump essentially threatened to invade a piece of European territory. And that was the kind of straw that broke the camel's back. ever since they've been working around the clock to figure out how to make NATO viable in Europe, even if America pulls out entirely, or the more likely scenario doesn't necessarily come to Europe's aid when the need arises.

3:17The U.S. military says its blockade of Iranian ports is in full force, and that ships trying to leave the country, including eight oil tankers, have turned back after being instructed to do so by U.S. forces. Meanwhile, U.S. officials say that more than 20 commercial ships that didn't visit Iran's ports have passed through the Strait of Hormuz in the last day. But Middle East correspondent Jared Malson told me that Iran is likely to make continued enforcement difficult. What we've seen so far is that the blockade is in place. You have some ships that have left the Strait of Hormuz and then turned around.

3:50It's also going to be complicated going forward for the Americans to decide which ships to stop, which is what we're reporting on today, is Iran's so-called shadow fleet of tankers that it uses to sell its oil, which is obviously heavily sanctioned by the U.S. and other countries. These are ships with dubious registration that fly under false flags sometimes that are used to evade sanctions. And so they are masters of disguise. They send out false signals of where they're coming from. They transfer oil from one ship to another. And so for the Americans to decide which ships really are subject to the blockade, that's kind of a complex question.

4:31However, at the moment, what we're seeing is that Iran isn't moving a whole lot. They are, however, testing the limits of the blockade. They are pushing the envelope by sending some of these ships out. One that we've been watching is called Rich Stari. That's a Chinese-owned tanker that left the Strait of Hormuz and then went back into the Gulf. It's sanctioned by the U.S. for working with Iran. And that is something to watch as this situation unfolds in the coming days. Although the U.S. says it began clearing mines in the strait on Saturday, the threat of mines and Iranian attacks is deterring most vessels from attempting to pass through.

5:13Mark your calendars because the Trump administration will start processing tariff refunds with interest starting April 20th. That's according to a trade court judge who said the government is on track to start accepting claims totaling about$127 billion of the$166 billion that it collected in tariffs later invalidated by the Supreme Court. The judge has ordered the administration to provide an update on the refund process by April 28th. One in seven Americans enrolled in Affordable Care Act health insurance plans have failed to make payments after a jump in premiums. New data shows that 14 percent of ACA enrollees didn't pay their first monthly bill in January, with a number jumping above 25 percent in some states.

5:56Here's Journal Health Insurance reporter Anna Wildey-Matthews. It's much steeper than in past years. And the reason for that is that people are being asked to pay a lot more for their coverage than they have in recent years. Federal subsidies that really helped with that burden have shrunk as of January 1st, and people are seeing much bigger bills, and some people are just unable or unwilling to pay those, and they're probably going to lose their plans. According to health research nonprofit KFF, the number of Americans without insurance is rising for the first time since 2019, and the Congressional Budget Office projects that 14 million more Americans will be uninsured by 2030 due to revised eligibility rules and the end of ACA subsidies.

6:44Maine has become the first U.S. state to ban the construction of large data centers. 21 senators having voted in the affirmative and 13 senators having voted in the negative. The enactment prevails. The state's Democratic-controlled state legislature yesterday approved a bill freezing construction of new data centers until late 2027, allowing Maine to assess environmental and grid risks. Officials also fear that data center demand will hike already high energy prices. Here was Democratic State Representative Melanie Sachs. Our infrastructure cannot handle this load without regulation. Perhaps we want to do a new load class so that the large load class does not impact ratepayers.

7:26Perhaps there wants to be an impact fee. Maybe these need to be completely islanded and what happens when that generation goes dark and it has to go on the grid for interconnection. At least 10 other states are considering similar moves. Elsewhere, the NAACP has sued Elon Musk's XAI, alleging that gas turbines at its Tennessee and Mississippi data centers are operating without legal air permits. The lawsuit claims that the emissions violate the Clean Air Act and pose serious health risks to locals, including increased rates of asthma, heart problems, and cancer. XAI didn't respond to a request for comment.

8:05And data centers may be facing political pressure, but the AI boom isn't showing signs of letting up, with chip machine supplier ASML today upping its yearly sales guidance. And we'll get another key pulse check on the health of the chips industry tomorrow, when one of the Dutch company's biggest clients, Taiwan Semiconductor Manufacturing Co., is due to report earnings. Coming up, it's tax day in the U.S., and after Should the IRS shed thousands of workers? We'll look at why Americans are feeling that they can cheat on their returns this year. That's after the break. In a new episode of Tech Fluential, Deloitte's Ludi Lorenzo talks with Gabriella Ricci, Chief Data and Technology Officer at Takeda, and Karen Ann Terrell, board member and former Chief Digital and Technology Officer across industries, on the role leaders play in operationalizing AI at scale, moving from experimentation to accountability.

8:56They discuss how leaders can embed AI into core operations and measure success by outcomes instead of pilots. Where technology and influence converge, new opportunities can emerge. That's Tech Fluential, a podcast from Deloitte and custom content from WSJ.

9:14It's tax day in the U.S. If that's news to you, don't worry, you can still file an extension. Check out the link that we've left in our show notes. But among those who are super on top of their taxes this year, Journal reporter Richard Rubin says a new mantra is emerging. The IRS isn't going to catch me. Richard, talk of tax avoidance is not a new thing. It's the basis basically for entire industries. And yet it sounds like what you are picking up on what you've been reporting on here is a bit different. A wave of tax evasion, maybe we could call it. What's going on and why is this happening now?

9:47Yeah, evasion implies criminal and willful. I think there's also sort of a middle tier of what we might call tax dodging of people taking aggressive positions that are on the borderline of legal. And I think what we're seeing, I'm talking to tax lawyers around the U.S., is people sort of noticing that the IRS is smaller than it was a year and a half ago. And they have fewer people to do audits, fewer people to enforce collections. And the agency on the enforcement side in particular has shrunken. And people notice that and may be ramping up their behavior. Yeah, but people are noticing that and the numbers back that up.

10:22There are just fewer people in enforcement now than there were in the Biden administration. Yeah, the IRS had been ramping up, right? Remember, Democrats gave the IRS$80 billion in 2022. Most of that, almost$47 billion, was for enforcement. They had about 103 ,000 people total at the beginning of 2025. They're now closer to 70 ,000 and aiming for a little bit lower. And the enforcement staff is actually lower than when Biden took office. And we've seen this administration propose even further reductions in IRS enforcement for the fiscal year that starts in October. Okay. So with that said, how are people trying to take advantage of the situation this year?

11:02So it's hard to know exactly what we don't see, but there's a range of things. There's, you know, you can enter in sort of aggressive transactions that try to create deductions where there shouldn't be. You can do outright evasion, just not report some cash income over state expenses. It's also true on the collection side. Remember, a big part of IRS enforcement is going out and getting money from people who agree they owe it. And so what we're starting to pick up is people at least thinking about where the line is and where they can blur things. Those sound, Richard, more like things that business owners might be inclined to do as opposed to maybe individual filers.

11:39Yeah. So workers, people who get wages in the US, there's the form W-2. We're all familiar with it. Your employer sends a W-2 that says how much you made to the IRS. They send a copy to you. If the W-2 says$75 ,000, very few workers just decide, hey, I'm going to say$65 ,000 because they know the IRS, even without an audit, will send out a letter to you that says this doesn't match. business owners just have more different margins for cash income, expenses, things that the IRS doesn't have independent information on. And the IRS studies for years have borne this out, that compliance rates are very high when the IRS has additional information, W-2s, 1099s, brokerage information, and a lot lower when the IRS doesn't have an easy way to verify.

12:27And that's in some ways what audits are for is they go out and force taxpayers to justify what they put on the return. So Richard, you know, how does this all net out, especially when the government tallies up its tax receipts this year? Yeah. So two points on this. One, the administration itself, you read the administration budget says that if you reduce IRS enforcement spending, there's missed opportunities to collect revenue and lost revenue for the United States. The second thing is the administration says, look, we're trying to get better and do as much as we can with fewer people. So you're seeing the administration and the IRS push into artificial intelligence and say, we can feed all of the data that we have and get a better sense of who we should audit, what cases to pick.

13:11It still takes humans on the back end to do the accounting and legal work for sure. And that creates bottlenecks if you have fewer people, but they really think they can make some significant strides in picking who to go after and having those be fruitful audits. In the shorter run, though, they certainly acknowledge that revenue will go down all else equal. Journal reporter Richard Rubin covers tax policy for us out of Washington, D.C. Richard, thanks so much for the time. Sure. Anytime. And that's it for What's News for this Wednesday morning. Today's show was produced by Hattie Moyer and Daniel Bach.

13:43Our supervising producer is Sandra Killhoff. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

13:59The Future of Everything is the Wall Street Journal's flagship live event, returning to New York City May 4th through 5th. Be there as CEOs, policymakers, and innovators sit down with our journalists to answer the most pressing questions of the day. From finance, tech, and economic policy to sports, streaming, and style, we're bringing together today's most compelling newsmakers for two days of conversations on what's ahead. Listeners of this podcast can access exclusive discounted rates by visiting wsj.com slash future. That's wsj.com slash future.