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As a Businessman, Trump Was the Biggest Loser

of All

By John Cassidy
May 8, 2019

Many Americans still believe that Donald Trump is a savvy and successful businessman, but a recent Times exposé on the Trump
family’s nancial records suggests the opposite. Photograph by Joe McNally / Getty

L
ast October, the New York Times published a monumental exposé of how Donald Trump and other members of the Trump
family engaged in sham nancial schemes during the nineteen-nineties, including what the newspaper described as
“instances of outright fraud,” to avoid paying hundreds of millions of dollars in taxes on the real-estate fortune that Fred Trump
passed on to his children. Last month, the three reporters who wrote the story—David Barstow, Susanne Craig, and Russ
Buettner—were awarded the Pulitzer Prize in explanatory reporting.

On Tuesday evening, the Times dropped another story that delved into the President’s nancial past. Written by Buettner and
Craig, and based upon “printouts from Mr. Trump’s official Internal Revenue Service transcripts” that the reporters obtained, the
story further undermined the assiduously promoted ction that Trump, before he became a reality-television star and entered
politics, was a highly successful self-made businessman. He was anything but.
Between 1985 and 1994, the Times story says, Trump’s core businesses lost money every single year, and the accumulated losses
came to more than a billion dollars. “In fact, year after year, Mr. Trump appears to have lost more money than nearly any other
individual American taxpayer, the Times found when it compared his results with detailed information the I.R.S. compiles on an
annual sampling of high-income earners,” Buettner and Craig write. “His core business losses in 1990 and 1991—more than $250
million each year—were more than double those of the nearest taxpayers in the I.R.S. information for those years.”

In case you didn’t take all that in, here is a quick recap: when Trump was portraying himself as a newly minted billionaire and
nancial genius, his core businesses were losing money hand over st. Assuming the Times reporters’ analysis of the I.R.S. data on
high earners is accurate—and there is no apparent reason to doubt it—he was the biggest loser in the country for two years in a
row.

Of course, anybody who has followed Trump’s career already knew that much of what he said was erroneous and deceptive. He
nanced the parts of his business portfolio that he didn’t inherit from Fred by taking on huge loans. During the recession of the
early nineteen-nineties, four of his highly indebted businesses declared bankruptcy—three casinos in Atlantic City and the Plaza
Hotel on Fifth Avenue. Other Trump businesses only survived because they were sold or his lenders decided they were worth more
as going concerns and allowed him to write down some of his debts.

The Times reporters and other journalists have already covered some of this troubled history. In September, 2016, the Times
received a copy of part of Trump’s 1995 tax return, which showed that he declared a massive tax loss, of nine hundred and sixteen
million dollars. Under tax laws, business owners are allowed to carry losses into subsequent years and offset them against income.
Trump’s loss was so huge in 1995, the Times noted, that it “could have allowed him to legally avoid paying any federal income taxes
for up to 18 years.” In response to that Times scoop, Trump’s campaign released a statement that didn’t challenge the nine-
hundred-and-sixteen-million-dollar loss but claimed that he “has paid hundreds of millions of dollars in property taxes, sales and
excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes.”

By lumping all the different taxes together, this statement seemed to concede that Trump’s federal-tax payments after 1995 weren’t
very large. The latest Times report con rms that Trump didn’t pay much tax in the decade before 1995, either. To wit: “Over all,
Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years.” (The story also notes, “It
is not known whether the I.R.S. later required changes after audits.”)

This revelation con rms another thing that many Trump skeptics have long suspected. The nancial problems his businesses faced
predated the bust of the early nineteen-nineties. “The numbers show that in 1985, Mr. Trump reported losses of $46.1 million
from his core businesses—largely casinos, hotels and retail space in apartment buildings,” the Times reported. “They continued to
lose money every year, totaling $1.17 billion in losses for the decade.” In 1987, Trump published a ghostwritten book—“Trump:
The Art of the Deal”—that became a best-seller and cemented his status as a celebrity. By the time the book came out, the story
notes, Trump “was already in deep nancial distress, losing tens of millions of dollars on troubled business deals.”

In response to inquiries from the Times, Charles Harder, a lawyer for Trump, claimed that the tax information the newspaper
obtained was “demonstrably false” but didn’t cite any speci c errors. Harder also described I.R.S. transcripts, which are official
records of full tax returns, as “notoriously inaccurate.” The Times story quoted a former director of research at the I.R.S., who
disputed this characterization and said that the agency’s own auditors often referred to tax transcripts as handy summaries of full
tax returns.

If the entries in Trump’s actual tax returns really differed materially from the gures in the I.R.S. transcripts that the Times cited,
Harder and Trump could have resolved the matter by showing the newspaper copies of the original documents. But they didn’t do
that, of course. Meanwhile, Trump and his Treasury Secretary, Steven Mnuchin, who oversees the I.R.S., are busy ghting
congressional requests for the President’s more recent tax records, and the matter seems to be headed for the courts. It’s too early
to say how that dispute will ultimately be resolved, but an amicable settlement seems highly unlikely.

Even now, there are a lot of Americans who believe that the President is a savvy and successful businessman who knows what he is
doing. The actual record, which, thanks to the Times, we now know a good deal more about, suggests the exact opposite. It reveals
Trump to be a reckless conman who burned money and relied on his father, even as he was fashioning a myth that eventually took
him all the way to the White House. No wonder he is so averse to allowing the American public to see any more accurate
information about his nancial history.

John Cassidy has been a staff writer at The New Yorker since 1995. He also writes a column about politics,
economics, and more for newyorker.com.

More: Donald Trump Tax Returns Bankruptcy New York Times