March 14, 2025 • 17 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Tina Hurley, Head of Planning and Ultra-High-Net-Worth Solutions at Citizens Wealth, discusses the impact of the "Great Wealth Transfer" could have on women. Bloomberg News Wealth Reporter Ben Steverman shares the details of his Businessweek story Trump’s No Tax on Tips Pledge May Cause ‘Crazy Things’ to Happen.
Hosts: Carol Massar and Matt Miller. Producer: Paul Brennan.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg
Business Week with Carol Masser and Tim Stenovek on Bloomberg Radio.
Speaker 2 (00:14):
All right, everybody, Carol Masser along with Matthew Miller Matt
of course in for Tim here in our Bloomberg Interactive
Broker Studio.
Speaker 1 (00:20):
What nothing, Okay, I'm excited with that we finally got
the correction. You know, Adam Johnson used to always say
the pause that refreshes and oh yeah, correction on the
S and P five hundred. Listen.
Speaker 2 (00:33):
Markets don't just go up, up, up right like you
know that, And I would still argue, I'm not an expert,
but just watching markets and market cycles that markets go up,
markets go down, and there is a point where you
want to see some of the fluff taken out of
especially after.
Speaker 1 (00:48):
A tremendous though. Yeah, stocks always go up.
Speaker 2 (00:52):
I mean, yeah, go back right, five years, ten years,
I mean it's yeah.
Speaker 1 (00:56):
Twenty years, fifty years.
Speaker 2 (00:57):
Exactly, exactly. All right, folk, let's talk about about what's
going on in the market, because we have seen retail
investors pour about seven point three billion into equities in
the week through Wednesday.
Speaker 1 (01:09):
I was thinking about that as well. See we you've
got all these on Wall Street, although I will say
they still have the strategists. If you type in SPX
index A n R you can see Lou Wang's survey
of the biggest Wall sreat strategists. It's fantastic work. And
we're still looking at an average year end price target
of sixty four seventy nine.
Speaker 2 (01:29):
We're at fifty five twenty one on the SMP.
Speaker 3 (01:31):
Yeah.
Speaker 1 (01:32):
That's a move up, all right, fourteen percent move up?
Speaker 2 (01:35):
Yeah, And I will say these retail investors, they were
boosting exposure to Tesla. This is coming from mlo A
Global Quantity, Quantitative and Derivative Strategies over JP Morgan. Let's
see if that's the case with the clients of our
next guest with us as Tina Hurley, head of Planning
an ultra high net worth solutions over at Citizens Wealth,
joining us from Johnston, Rhode Island. Tina, good to have
(01:56):
you here with Matt and myself. So I am curious
what's your client's mood right now and sentiment. Are they
looking to put more money to work or are they
in kind of a risk off type of mood?
Speaker 4 (02:08):
Yeah?
Speaker 3 (02:08):
Well, hey, thanks for having me appreciate the time today.
You know, I think you know, in general, when we're
working with our clients, we're really focused on their unique
goals and so some are and some are not right,
So it depends on what's going on with that particular client,
what's going on with their families, and our advisors are
really taking the lead from the client in terms of
(02:30):
their goals and creating a well strategy that's appropriate for them.
Speaker 1 (02:35):
All right, So I guess there's you don't have an overview,
like an average what your clients are doing.
Speaker 2 (02:41):
But you don't do you don't tell people like, hey, listen,
if you really like this name, which you have liked
for a year or two, this is an opportunity to
get it, you know, Like I am curious if you
know that in this environment, is is it opportunistic? I mean,
is it investible? Is it an investable market? In your view?
Speaker 3 (03:00):
Well, here's what I would say. In our business, we're
investing for the long haul. So as I was listening
to you guys, you were talking about the market always
goes up, whether it's ten years, twenty years, one hundred years,
and so that's what we're looking at is really making
sure that we're doing what's best for our clients in
the long term.
Speaker 1 (03:18):
Yeah, I mean that's exactly what I was thinking. If
you're in for another ten years, I probably won't retire
for twenty, right, So I guess it can't be a
bad point to buy when the market is dropped ten percent. Now,
if you have a shorter window, if you're looking at
a few years, or if you're retiring soon, what do
you think about rates at this level?
Speaker 3 (03:40):
Well, you know, I think that's a variable. You know,
all of our advisors are really trying to balance. Again,
when we're leading with planning, we're thinking about the long
term goals and balancing rates of across the industry, whether
that's in the market or it's in a cash position.
So it's important for us, I think, to take a
step back and really spend the time necessary to understand
(04:02):
what those clients' long term goals are, whether it's you know,
an interest rate, interest that the client has, or it's
really just achieving that goal.
Speaker 1 (04:11):
Let me ask it. Let me ask though about you know,
I get that everyone has different investment horizons, and everybody
has different risk aversion, and that you deal with really
a diverse clientele, but in general, right, if you look
at expectations going into this year, you know post November,
(04:34):
the rocket launch that we had when Trump won, and
what we're seeing develop now, how do you think that
turned out and where do you think it's going.
Speaker 3 (04:45):
Well, Listen, I'm not going to predict markets, That's not
what I do. But I will tell you we're going
to stay in it for the long haul with our
clients over a period of time, make sure that they
are invested appropriately to achieve their goals.
Speaker 2 (05:00):
So one thing I did want to ask you, because
I know you guys have done some research about women
in particular and the Great Wealth Transfer. But before I
ask you that, is there anything that you've noticed with
your clients when it comes to men versus women, how
they deal with volatility, how they deal with risk or
risk off in this kind of environment. I'm just curious
if there's any trends that you've noticed.
Speaker 3 (05:21):
Yeah, you know, actually, yeah, thanks Carol for asking that,
because you know generally what we're seeing from women and
this is really you know, embedded within the survey that
we did, the risk aware and so they are thinking
about stability, They do think about prioritizing caring for their children,
and so as we're working with them and developing a
(05:43):
financial plan or an estate plan, we're really thinking about
the investments that match that priority for that unique individual.
But in general, women do lean more towards stability.
Speaker 1 (05:55):
What kind of you know? I was talking about this
wealth transfer is Sally crawlcheck a couple months ago. I
thought it was fascinating because, I mean, how much money
are we talking about here? I've heard ed Yard Denny
estimate that the baby boomers have like seventy five trillion
dollars in assets. So how big is this, Tina, And
(06:17):
how much do you expect to end up? This is
something I thought was interesting from Sally's perspective. How much
do you think is going to end up in the
hands of women as opposed to men?
Speaker 3 (06:26):
Yeah, great question, Matt. You know, overall, I think we're
seeing that one hundred and twenty four trillion dollars transitioning
now through twenty forty eight.
Speaker 1 (06:38):
One hundred and twenty four trillion dollars.
Speaker 3 (06:40):
Brillion trillion, Yeah, thirty four trillion is really transitioning to women.
And it's transitioning to women because you think about, first
of all, women outlive men. Right, So you've got this
this sort of predeceased situation where you've got a widow
that will receeve thirty four trillion dollars, and it's very
(07:03):
significant and it's a huge opportunity. You know, the way
we look at it is, this is our opportunity to
really dig deep. You know, when we lead with planning,
we're doing really deep discovery. We better educate those women
because they're not quite confident yet. We've really got to
work on making sure that we're empowering them. These are
going to be the recipients of thirty four trillion dollars,
(07:26):
by the way, in the next five years. So of
that one, twenty four, thirty four trillion is moving to
women in by twenty thirty. It's huge, and it's a
huge opportunity for us to empower these women to be
able to take control of their financial futures.
Speaker 2 (07:41):
Tina, who are these women? Because I feel like this
is a conversation I had I think years ago. I
remember actually Don Strassheim, if you remember from I think
it was Meryl and he used to talk used to
talk about that he actually took his wife to an
investment advisor that she felt comfortable with. But this is
(08:02):
I'm going to date myself like thirty years ago. So
who are these women that you know.
Speaker 1 (08:07):
Well, a lot of times they're picking new investment advisors.
This they are this is an issue, right, So you're
going to see a lot of that money, those huge numbers,
Tina that you're talking about, move right.
Speaker 3 (08:17):
That's right, that's right, which is which is frankly, why
the advisor's role in this is so critical.
Speaker 1 (08:23):
They have to be.
Speaker 3 (08:24):
Engaged with both parties now, now more than ever. They
need to be making sure that these women are comfortable
and gain confidence. So it might mean that these advisors
really need to spart start spending time educating women on
basic financials or you know, when they are still married
and the husband hasn't passed yet, make sure both are
at the meeting so they're talking to both people and
(08:46):
they really understand the depth of that relationship, so that Matt,
they don't move when that husband deceases. You know, at
the end of the day, this is about making sure
that a woman feels confident at the table and comfortable
talk about our finances. You know, when we did that survey,
eighty four percent of the women who responded, are still
(09:08):
not confident about money matters, and so we really have
to embrace this moment and dig in and really make
sure that we are spending time not only with the
women but with their children, because that ends up being
one of the top three priorities of women when they're
thinking about financial future.
Speaker 2 (09:25):
All right, well, good to spend some time with you,
Tina Hurley. She's head of planning an ultra high networth
solutions over at Citizen Wealth, joining us from Rhode.
Speaker 1 (09:32):
I hope also that this younger generation of women, and
I think for sure is going to be much more confident,
you know, than previous generations.
Speaker 2 (09:40):
I think so. I think women are in some way.
Speaker 1 (09:42):
I'm more comfort than in my future because my wife
has taken over our finances.
Speaker 4 (09:46):
She's going to take care of you.
Speaker 2 (09:47):
I wanted to get to a story out from the
Business Week team. Donald Trump's promise to eliminate taxes on
tips and overtime pay has raised concerns among tax experts,
who warned that such a policy could have unint tended
consequences and create complexity in the tax code. With more
on what some say are the possibly crazy things that
could happen is Bloomberg News Wealth reporter Ben Steverman. He
(10:10):
joins us now in New York.
Speaker 1 (10:11):
His Business Week story.
Speaker 2 (10:12):
By the way, it's on the Bloomberg terminal, and you
can find it also at Bloomberg dot com slash BusinessWeek.
Ben bring this up, and I got to say, you
get a pretty good debate on this issue. Remind us
about the president's pledge and how this could ultimately work,
especially something like tips, which seemed to be kind of
a tough thing to track.
Speaker 4 (10:33):
Yeah, so these promises came out of Donald Trump's stuff
speech last year, and he says the origin of the
no tax on tips was just a waitress at his
hotel in Las Vegas walked up to him and said,
you shouldn't have taxes on tips. And he liked the
way that sounded. And the pole suggests voters like it too.
(10:56):
But when I talked to experts about this, I really
hate the idea of exact emptying one kind of income,
whether that's tips or over time, from everything else because
it just kind of just opens up a ball of
big can of worms. It's because it just it incentivizes
people to shift their money income from one category to another,
(11:19):
and so it's then it just becomes really important how
you write the rules, how you draw those lines. And
then that drawing of the lines makes everything more complicated
for taxpayers, especially the ones who want to access the benefit.
Speaker 1 (11:33):
I mean, on the one hand, I understand that because
then I guess the idea is I could go over
to my boss and say, listen, instead of paying me
a salary and a bonus, can you just give me
like a small penance and then it tip me at
the end of the year. It's not really going to happen, though,
is it. And let's be honest, those of us who
(11:54):
have worked in jobs for tips in the past, Carol,
do you ever wait tables?
Speaker 2 (11:57):
No?
Speaker 1 (11:58):
All right, well I waited take and I never paid
tax on those tips, like nobody did. Just what I mean,
how does do people pay taxes on tips? They do?
Speaker 4 (12:10):
Now? I think this is one of the reasons this
is coming up is that credit because of credit cards
and debit cards, this has gotten a lot easier to track,
so far more of tip income. Back in the sixties,
the IRS estimated that only twenty percent of tips were
being reported. And I just looked at a study actually
(12:31):
several years old now, but it suggested more than two
thirds of restaurant tips are now being reported. One of
the issues with this is that the proposals that Republicans
and Trump would be talking about are exempting tips in
overtime from income taxes. But really the important tax that
(12:54):
tip people pay is payroll taxes. Two thirds of tip
workers pay never never pay income taxes, and most workers
pay more in payroll taxes and income taxes. So one
issue here is that they're going to be they could
be exempting this kind of income, but really it doesn't
really end up benefiting very many of the people who
(13:15):
are actually waiting tables or working at coffee shops or
all the other things that get tipped.
Speaker 1 (13:20):
How did you avoid waiting tables, Carol, I had other jobs.
I love the you know, obviously people are going to
try and game the system, Ben, and I love the
example you bring up. I was thinking about this recently.
I don't know where I was looking at a building
with bricked windows and trying to remember I thought, I knew,
why did they do that? And you remind us that
(13:44):
some king in the sixteen hundreds in Britain started taxing
buildings based on the number of windows and of course
what happens is then all the landlords brick up as
many windows as they possibly can.
Speaker 4 (13:56):
Yeah, And somehow that tax was on the books for
like one hundred and fifty years, and so you ended
up with all these tenements poor people were living in
that didn't have enough light, didn't have enough ventilation. And
it's just an example of these unintended consequences that tax
changes can have. It's often things you might not even
think about when you pass the bill.
Speaker 1 (14:17):
You know.
Speaker 4 (14:17):
Another example I bring up is the luxury tax that
was passed in nineteen ninety that was just seemed like
a good way to close the budget deficit poor people,
which wealthy people will pay, this tax will ended up
like devastating the yacht industry and in the United States,
and all these working class people lost their jobs and
it really didn't bring in much revenue, and it was
(14:39):
repealed in a couple of years in that case. So
what we were trying to do in the piece is
just kind of like, imagine how people are going to
use these because it really sometimes it can take a
few years before the effects can be really felt.
Speaker 2 (14:54):
I mean, do people also think that, I don't know,
there's part of me. I feel bad because I feel
like people who get tips they often have a lower wage, right,
and so the whole idea is that they make it
up in their tips. But at the same time, I
pay taxes on everything I make, and so why, like
to how you started, like why should should you become.
Speaker 1 (15:15):
Super rich people? You know, Well, that's much lower percentage
than because it's investment income.
Speaker 2 (15:19):
It's like a whole right, there's a whole other thing.
But will people then maybe stop tipping because they're ticked
off and they're saying I pay taxes, but you don't
have to on your tips, Like could there be I
don't know what are you hearing?
Speaker 4 (15:31):
Yeah, I mean only about two and a half percent
of people work of the workforce gets tips, and there
are a lot of working class people. So we think
about the cook in the kitchen isn't necessarily getting the tips.
Sometimes they sometimes restaurants pool tips. And you might know
Matt better than me, but yeah, like a convenience store
(15:51):
clerk making thirty thousand dollars a year and and a
waiter making thirty thousand dollars a year, one of them
would be getting a tax break under this plan. Then
the other would still be paying the normal amount. So
does that end up creating resent me when people get
around ask for those tips. We're being asked now everywhere
we go on those screens that they toward us, you
(16:13):
know twenty five thirty percent. Do people start saying no
more often that this could this could backfire in that
way as well?
Speaker 1 (16:22):
Hang on a second, did you also never work as
a waiter? Ben?
Speaker 4 (16:27):
So, I actually worked as a lifeguard. And we were
looking at some data on what occupations get tipped, and
some people said that they actually tipped lifeguard that I've
never I never got a tip doing lifeguarding.
Speaker 1 (16:40):
I was a short ordered cook. I was a dishwasher.
I was a stick out a boy. I was a busboy.
Speaker 2 (16:47):
I did clean houses or a house at once.
Speaker 1 (16:50):
You cleaned the house once, Carol, No.
Speaker 2 (16:52):
No, no, I don't mean just once, but I mean
I had a job that regularly I cleaned a house.
It was a gorgeous house, by the way.
Speaker 1 (16:59):
All right, I think it's a great story, Ben, and
I recommend everyone. Obviously we didn't get to the other
things right. Over time, you could game the system with
that no tax on social Security. I was frankly surprised
when I learned that people have to pay taxes on
sales security.
Speaker 2 (17:14):
Now I know, I know.
Speaker 1 (17:14):
I'm against taxes in general.
Speaker 2 (17:16):
So check out ben story. I also did inventory and
a factory. I've done that, all right.
Speaker 1 (17:21):
So you you did a little bit it wor ARC.
Speaker 2 (17:23):
Yeah, I just did different jobs.
Speaker 1 (17:25):
That's good, all right. It's important teaches a little responsibility.
Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg
Business Week with Carol Masser and Tim Stenovek on Bloomberg Radio.
Speaker 2 (00:14):
All right, everybody, Carol Masser along with Matthew Miller Matt
of course in for Tim here in our Bloomberg Interactive
Broker Studio.
Speaker 1 (00:20):
What nothing, Okay, I'm excited with that we finally got
the correction. You know, Adam Johnson used to always say
the pause that refreshes and oh yeah, correction on the
S and P five hundred. Listen.
Speaker 2 (00:33):
Markets don't just go up, up, up right like you
know that, And I would still argue, I'm not an expert,
but just watching markets and market cycles that markets go up,
markets go down, and there is a point where you
want to see some of the fluff taken out of
especially after.
Speaker 1 (00:48):
A tremendous though. Yeah, stocks always go up.
Speaker 2 (00:52):
I mean, yeah, go back right, five years, ten years,
I mean it's yeah.
Speaker 1 (00:56):
Twenty years, fifty years.
Speaker 2 (00:57):
Exactly, exactly. All right, folk, let's talk about about what's
going on in the market, because we have seen retail
investors pour about seven point three billion into equities in
the week through Wednesday.
Speaker 1 (01:09):
I was thinking about that as well. See we you've
got all these on Wall Street, although I will say
they still have the strategists. If you type in SPX
index A n R you can see Lou Wang's survey
of the biggest Wall sreat strategists. It's fantastic work. And
we're still looking at an average year end price target
of sixty four seventy nine.
Speaker 2 (01:29):
We're at fifty five twenty one on the SMP.
Speaker 3 (01:31):
Yeah.
Speaker 1 (01:32):
That's a move up, all right, fourteen percent move up?
Speaker 2 (01:35):
Yeah, And I will say these retail investors, they were
boosting exposure to Tesla. This is coming from mlo A
Global Quantity, Quantitative and Derivative Strategies over JP Morgan. Let's
see if that's the case with the clients of our
next guest with us as Tina Hurley, head of Planning
an ultra high net worth solutions over at Citizens Wealth,
joining us from Johnston, Rhode Island. Tina, good to have
(01:56):
you here with Matt and myself. So I am curious
what's your client's mood right now and sentiment. Are they
looking to put more money to work or are they
in kind of a risk off type of mood?
Speaker 4 (02:08):
Yeah?
Speaker 3 (02:08):
Well, hey, thanks for having me appreciate the time today.
You know, I think you know, in general, when we're
working with our clients, we're really focused on their unique
goals and so some are and some are not right,
So it depends on what's going on with that particular client,
what's going on with their families, and our advisors are
really taking the lead from the client in terms of
(02:30):
their goals and creating a well strategy that's appropriate for them.
Speaker 1 (02:35):
All right, So I guess there's you don't have an overview,
like an average what your clients are doing.
Speaker 2 (02:41):
But you don't do you don't tell people like, hey, listen,
if you really like this name, which you have liked
for a year or two, this is an opportunity to
get it, you know, Like I am curious if you
know that in this environment, is is it opportunistic? I mean,
is it investible? Is it an investable market? In your view?
Speaker 3 (03:00):
Well, here's what I would say. In our business, we're
investing for the long haul. So as I was listening
to you guys, you were talking about the market always
goes up, whether it's ten years, twenty years, one hundred years,
and so that's what we're looking at is really making
sure that we're doing what's best for our clients in
the long term.
Speaker 1 (03:18):
Yeah, I mean that's exactly what I was thinking. If
you're in for another ten years, I probably won't retire
for twenty, right, So I guess it can't be a
bad point to buy when the market is dropped ten percent. Now,
if you have a shorter window, if you're looking at
a few years, or if you're retiring soon, what do
you think about rates at this level?
Speaker 3 (03:40):
Well, you know, I think that's a variable. You know,
all of our advisors are really trying to balance. Again,
when we're leading with planning, we're thinking about the long
term goals and balancing rates of across the industry, whether
that's in the market or it's in a cash position.
So it's important for us, I think, to take a
step back and really spend the time necessary to understand
(04:02):
what those clients' long term goals are, whether it's you know,
an interest rate, interest that the client has, or it's
really just achieving that goal.
Speaker 1 (04:11):
Let me ask it. Let me ask though about you know,
I get that everyone has different investment horizons, and everybody
has different risk aversion, and that you deal with really
a diverse clientele, but in general, right, if you look
at expectations going into this year, you know post November,
(04:34):
the rocket launch that we had when Trump won, and
what we're seeing develop now, how do you think that
turned out and where do you think it's going.
Speaker 3 (04:45):
Well, Listen, I'm not going to predict markets, That's not
what I do. But I will tell you we're going
to stay in it for the long haul with our
clients over a period of time, make sure that they
are invested appropriately to achieve their goals.
Speaker 2 (05:00):
So one thing I did want to ask you, because
I know you guys have done some research about women
in particular and the Great Wealth Transfer. But before I
ask you that, is there anything that you've noticed with
your clients when it comes to men versus women, how
they deal with volatility, how they deal with risk or
risk off in this kind of environment. I'm just curious
if there's any trends that you've noticed.
Speaker 3 (05:21):
Yeah, you know, actually, yeah, thanks Carol for asking that,
because you know generally what we're seeing from women and
this is really you know, embedded within the survey that
we did, the risk aware and so they are thinking
about stability, They do think about prioritizing caring for their children,
and so as we're working with them and developing a
(05:43):
financial plan or an estate plan, we're really thinking about
the investments that match that priority for that unique individual.
But in general, women do lean more towards stability.
Speaker 1 (05:55):
What kind of you know? I was talking about this
wealth transfer is Sally crawlcheck a couple months ago. I
thought it was fascinating because, I mean, how much money
are we talking about here? I've heard ed Yard Denny
estimate that the baby boomers have like seventy five trillion
dollars in assets. So how big is this, Tina, And
(06:17):
how much do you expect to end up? This is
something I thought was interesting from Sally's perspective. How much
do you think is going to end up in the
hands of women as opposed to men?
Speaker 3 (06:26):
Yeah, great question, Matt. You know, overall, I think we're
seeing that one hundred and twenty four trillion dollars transitioning
now through twenty forty eight.
Speaker 1 (06:38):
One hundred and twenty four trillion dollars.
Speaker 3 (06:40):
Brillion trillion, Yeah, thirty four trillion is really transitioning to women.
And it's transitioning to women because you think about, first
of all, women outlive men. Right, So you've got this
this sort of predeceased situation where you've got a widow
that will receeve thirty four trillion dollars, and it's very
(07:03):
significant and it's a huge opportunity. You know, the way
we look at it is, this is our opportunity to
really dig deep. You know, when we lead with planning,
we're doing really deep discovery. We better educate those women
because they're not quite confident yet. We've really got to
work on making sure that we're empowering them. These are
going to be the recipients of thirty four trillion dollars,
(07:26):
by the way, in the next five years. So of
that one, twenty four, thirty four trillion is moving to
women in by twenty thirty. It's huge, and it's a
huge opportunity for us to empower these women to be
able to take control of their financial futures.
Speaker 2 (07:41):
Tina, who are these women? Because I feel like this
is a conversation I had I think years ago. I
remember actually Don Strassheim, if you remember from I think
it was Meryl and he used to talk used to
talk about that he actually took his wife to an
investment advisor that she felt comfortable with. But this is
(08:02):
I'm going to date myself like thirty years ago. So
who are these women that you know.
Speaker 1 (08:07):
Well, a lot of times they're picking new investment advisors.
This they are this is an issue, right, So you're
going to see a lot of that money, those huge numbers,
Tina that you're talking about, move right.
Speaker 3 (08:17):
That's right, that's right, which is which is frankly, why
the advisor's role in this is so critical.
Speaker 1 (08:23):
They have to be.
Speaker 3 (08:24):
Engaged with both parties now, now more than ever. They
need to be making sure that these women are comfortable
and gain confidence. So it might mean that these advisors
really need to spart start spending time educating women on
basic financials or you know, when they are still married
and the husband hasn't passed yet, make sure both are
at the meeting so they're talking to both people and
(08:46):
they really understand the depth of that relationship, so that Matt,
they don't move when that husband deceases. You know, at
the end of the day, this is about making sure
that a woman feels confident at the table and comfortable
talk about our finances. You know, when we did that survey,
eighty four percent of the women who responded, are still
(09:08):
not confident about money matters, and so we really have
to embrace this moment and dig in and really make
sure that we are spending time not only with the
women but with their children, because that ends up being
one of the top three priorities of women when they're
thinking about financial future.
Speaker 2 (09:25):
All right, well, good to spend some time with you,
Tina Hurley. She's head of planning an ultra high networth
solutions over at Citizen Wealth, joining us from Rhode.
Speaker 1 (09:32):
I hope also that this younger generation of women, and
I think for sure is going to be much more confident,
you know, than previous generations.
Speaker 2 (09:40):
I think so. I think women are in some way.
Speaker 1 (09:42):
I'm more comfort than in my future because my wife
has taken over our finances.
Speaker 4 (09:46):
She's going to take care of you.
Speaker 2 (09:47):
I wanted to get to a story out from the
Business Week team. Donald Trump's promise to eliminate taxes on
tips and overtime pay has raised concerns among tax experts,
who warned that such a policy could have unint tended
consequences and create complexity in the tax code. With more
on what some say are the possibly crazy things that
could happen is Bloomberg News Wealth reporter Ben Steverman. He
(10:10):
joins us now in New York.
Speaker 1 (10:11):
His Business Week story.
Speaker 2 (10:12):
By the way, it's on the Bloomberg terminal, and you
can find it also at Bloomberg dot com slash BusinessWeek.
Ben bring this up, and I got to say, you
get a pretty good debate on this issue. Remind us
about the president's pledge and how this could ultimately work,
especially something like tips, which seemed to be kind of
a tough thing to track.
Speaker 4 (10:33):
Yeah, so these promises came out of Donald Trump's stuff
speech last year, and he says the origin of the
no tax on tips was just a waitress at his
hotel in Las Vegas walked up to him and said,
you shouldn't have taxes on tips. And he liked the
way that sounded. And the pole suggests voters like it too.
(10:56):
But when I talked to experts about this, I really
hate the idea of exact emptying one kind of income,
whether that's tips or over time, from everything else because
it just kind of just opens up a ball of
big can of worms. It's because it just it incentivizes
people to shift their money income from one category to another,
(11:19):
and so it's then it just becomes really important how
you write the rules, how you draw those lines. And
then that drawing of the lines makes everything more complicated
for taxpayers, especially the ones who want to access the benefit.
Speaker 1 (11:33):
I mean, on the one hand, I understand that because
then I guess the idea is I could go over
to my boss and say, listen, instead of paying me
a salary and a bonus, can you just give me
like a small penance and then it tip me at
the end of the year. It's not really going to happen, though,
is it. And let's be honest, those of us who
(11:54):
have worked in jobs for tips in the past, Carol,
do you ever wait tables?
Speaker 2 (11:57):
No?
Speaker 1 (11:58):
All right, well I waited take and I never paid
tax on those tips, like nobody did. Just what I mean,
how does do people pay taxes on tips? They do?
Speaker 4 (12:10):
Now? I think this is one of the reasons this
is coming up is that credit because of credit cards
and debit cards, this has gotten a lot easier to track,
so far more of tip income. Back in the sixties,
the IRS estimated that only twenty percent of tips were
being reported. And I just looked at a study actually
(12:31):
several years old now, but it suggested more than two
thirds of restaurant tips are now being reported. One of
the issues with this is that the proposals that Republicans
and Trump would be talking about are exempting tips in
overtime from income taxes. But really the important tax that
(12:54):
tip people pay is payroll taxes. Two thirds of tip
workers pay never never pay income taxes, and most workers
pay more in payroll taxes and income taxes. So one
issue here is that they're going to be they could
be exempting this kind of income, but really it doesn't
really end up benefiting very many of the people who
(13:15):
are actually waiting tables or working at coffee shops or
all the other things that get tipped.
Speaker 1 (13:20):
How did you avoid waiting tables, Carol, I had other jobs.
I love the you know, obviously people are going to
try and game the system, Ben, and I love the
example you bring up. I was thinking about this recently.
I don't know where I was looking at a building
with bricked windows and trying to remember I thought, I knew,
why did they do that? And you remind us that
(13:44):
some king in the sixteen hundreds in Britain started taxing
buildings based on the number of windows and of course
what happens is then all the landlords brick up as
many windows as they possibly can.
Speaker 4 (13:56):
Yeah, And somehow that tax was on the books for
like one hundred and fifty years, and so you ended
up with all these tenements poor people were living in
that didn't have enough light, didn't have enough ventilation. And
it's just an example of these unintended consequences that tax
changes can have. It's often things you might not even
think about when you pass the bill.
Speaker 1 (14:17):
You know.
Speaker 4 (14:17):
Another example I bring up is the luxury tax that
was passed in nineteen ninety that was just seemed like
a good way to close the budget deficit poor people,
which wealthy people will pay, this tax will ended up
like devastating the yacht industry and in the United States,
and all these working class people lost their jobs and
it really didn't bring in much revenue, and it was
(14:39):
repealed in a couple of years in that case. So
what we were trying to do in the piece is
just kind of like, imagine how people are going to
use these because it really sometimes it can take a
few years before the effects can be really felt.
Speaker 2 (14:54):
I mean, do people also think that, I don't know,
there's part of me. I feel bad because I feel
like people who get tips they often have a lower wage, right,
and so the whole idea is that they make it
up in their tips. But at the same time, I
pay taxes on everything I make, and so why, like
to how you started, like why should should you become.
Speaker 1 (15:15):
Super rich people? You know, Well, that's much lower percentage
than because it's investment income.
Speaker 2 (15:19):
It's like a whole right, there's a whole other thing.
But will people then maybe stop tipping because they're ticked
off and they're saying I pay taxes, but you don't
have to on your tips, Like could there be I
don't know what are you hearing?
Speaker 4 (15:31):
Yeah, I mean only about two and a half percent
of people work of the workforce gets tips, and there
are a lot of working class people. So we think
about the cook in the kitchen isn't necessarily getting the tips.
Sometimes they sometimes restaurants pool tips. And you might know
Matt better than me, but yeah, like a convenience store
(15:51):
clerk making thirty thousand dollars a year and and a
waiter making thirty thousand dollars a year, one of them
would be getting a tax break under this plan. Then
the other would still be paying the normal amount. So
does that end up creating resent me when people get
around ask for those tips. We're being asked now everywhere
we go on those screens that they toward us, you
(16:13):
know twenty five thirty percent. Do people start saying no
more often that this could this could backfire in that
way as well?
Speaker 1 (16:22):
Hang on a second, did you also never work as
a waiter? Ben?
Speaker 4 (16:27):
So, I actually worked as a lifeguard. And we were
looking at some data on what occupations get tipped, and
some people said that they actually tipped lifeguard that I've
never I never got a tip doing lifeguarding.
Speaker 1 (16:40):
I was a short ordered cook. I was a dishwasher.
I was a stick out a boy. I was a busboy.
Speaker 2 (16:47):
I did clean houses or a house at once.
Speaker 1 (16:50):
You cleaned the house once, Carol, No.
Speaker 2 (16:52):
No, no, I don't mean just once, but I mean
I had a job that regularly I cleaned a house.
It was a gorgeous house, by the way.
Speaker 1 (16:59):
All right, I think it's a great story, Ben, and
I recommend everyone. Obviously we didn't get to the other
things right. Over time, you could game the system with
that no tax on social Security. I was frankly surprised
when I learned that people have to pay taxes on
sales security.
Speaker 2 (17:14):
Now I know, I know.
Speaker 1 (17:14):
I'm against taxes in general.
Speaker 2 (17:16):
So check out ben story. I also did inventory and
a factory. I've done that, all right.
Speaker 1 (17:21):
So you you did a little bit it wor ARC.
Speaker 2 (17:23):
Yeah, I just did different jobs.
Speaker 1 (17:25):
That's good, all right. It's important teaches a little responsibility.
Hosts And Creators
Tim Stenovec
Carol Massar
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