Jane Bryant Quinn, long-trusted personal finance journalist and commentator, never pulls punches in appraising financial advisors. She doesn’t do so when it comes to politicians, either. Indeed, she calls Sen. Elizabeth Warren’s wealth tax proposal “nuts” and “hopeless.”
“It will never get anywhere,” she argued in an interview with ThinkAdvisor in February. Warren, D-Mass., introduced the Ultra-Millionaire Tax Act Monday after pledging to do so when she joined the Senate Finance Committee.
Quinn, a bestselling author, is also forthright about annuities: She discusses two different “sucker factors” that often hold sway when folks are deciding whether or not to buy them.
One of The 25 Most Influential Women in the U.S., according to The World Almanac, Quinn last year released her most recent book: “How To Make Your Money Last: The indispensable Retirement Guide” (Simon and Schuster- Revised 2020).
The native of Niagara Falls, New York, took some of her own best advice when in 2019 she retired and relocated to Rome with her husband, Carll Tucker, the retired founder of dailyvoice.com.
But that doesn’t mean Quinn isn’t keeping up with the vicissitudes of Americans’ finances or the stock market.
In the interview, she discusses the “K-shaped” U.S. economic recovery and the dichotomy between the booming market and the struggles of unemployed consumers beaten down financially by the impact of the coronavirus pandemic.
Further, she opines on better ways to collect additional taxes from the super-wealthy than Warren’s wealth tax on fortunes above $50 million.
“Weird” is what she calls Warren’s proposal, which would impose a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion. It would also levy a 1% annual surtax on net worth of more than $1 billion.
For three decades, Quinn wrote a bi-weekly column for Newsweek. Other long-running columns were for Bloomberg and CBSMoneyWatch. An Emmy winner, she co-hosted public television’s “Beyond Wall Street” and her own PBS program, “Take Charge!” Plus, she appeared on CBS News for 10 years, as well as on other network shows.
In the interview, she talks about “good” financial advisors” and “fake fiduciaries” and reveals the role her own FA plays in helping with her personal finances.
ThinkAdvisor interviewed Quinn on February 8. She was speaking by phone from her home in Rome. Commenting on the market, she said: “As far as investing is concerned, the pandemic has been a wow.”
Here are highlights of our interview:
THINKADISOR: What are your thoughts about the legislation [Ultra-Millionaire Tax Act] on “fortunes above $50 million” that Elizabeth Warren is introducing as her “first order of business” as a member of the Senate Finance Committee?
JANE BRYANT QUINN: The idea of a wealth tax is nuts. It’s hopeless: It will never get anywhere.
How do you figure out somebody’s total wealth? Is it your financial wealth? The homes you own? The homes you own in Sardinia? Your art collection? Jewelry? How do we find out about all the assets, including personal assets?
Do we send police into people’s homes to look inside a woman’s jewelry box? It’s absolutely impossible to find out what one’s total wealth is. And I think it would be refused, given the kind of surveillance that would be necessary. It’s an invasion of privacy. I think it’s a weird proposal.
Is there another type of tax that the very wealthy would pay that you prefer?
A transaction tax – 10 basis points per transaction – focused on high-income people. It can raise a lot of money from high-frequency traders, and it also would affect people’s pension funds and mutual funds because they’re all trading too.
What do you think of a surcharge, such as the one Michael Bloomberg proposed when he was running for president? It was a 5% surtax on incomes over $5 million a year.
A surcharge is a pretty good, clean tax because you’re just upping an individual’s income tax, say, 5%. It’s an easy way to collect [more]. You just say that people with incomes above $5 million [for example] pay 5% extra on their taxes for “X” years until the deficit is fixed.
Any other reason for your liking a surtax?
It’s got a good story behind it because you can say, “You’re the guys who got all the big tax breaks under Trump. So now let’s get some of that back.”
You write about “the sucker factor” with regard to immediate annuities. Please explain.
The sucker factor is that you’re afraid you’ll be a sucker if you buy an immediate annuity, to get a fixed income for life, because you might die in five years. But by not buying one, you’re giving up the possibility of a higher income per month. That’s [crazy].
What’s your thinking?
For people who need income, moving some money out of a bond fund and into an immediate annuity from a top-rated insurance company is a good thing, a good deal. An immediate annuity provides higher income for conservative investors. If you take half of what you’ve invested in a bond mutual fund and put it into an immediate annuity, you’ll get a higher income per month.
But it’s a realistic possibility that you could die in five years, correct?