Running for president was the worst business decision Trump ever made
By Megan McArdle,
We do not live in a just world. Keep that in mind if Sunday’s New York Times revelations about President Trump’s tax returns have kindled hope in your breast that he’s finally — finally! — about to get his comeuppance.
Yes, Trump appears to have reduced his tax bill through a series of skeevy deductions for personal expenses and “consulting” payments to his family, and, yes, Trump paid a mere $1,500 in income taxes, total, in 2016 and 2017, according to the Times. Moreover, that may itself have been sleight of hand, a token amount so that Trump could truthfully say he was paying taxes.
Yes, you almost certainly pay more than $750 a year in income taxes. I pay more than that in income taxes. A friend’s son paid more during the summer he worked as a camp counselor.
No, none of us has $10 billion, like Trump (dubiously) has claimed
. And yes, we all, in our small way, have subsidized this alleged billionaire’s pricey hairstyling and extended stays in luxury accommodation.
Yes, too, foreign interests and miscellaneous characters appear to have become big spenders at Trump properties since he started running for president.
But we knew he was a tax chiseler and a scoundrel before the Times story broke. We knew it before he became president, because he bragged about it on the campaign trail. If voters didn’t care then, why would they start to now?
If the numbers weren’t so complicated to parse, voters might be more interested in learning that his businesses aren’t so profitable — something Trump would surely never admit. Indeed, he sold himself as a top-notch manager with a Midas touch: not some useless politician, but an actual businessman, someone who knew how to make things happen in the real world.
The Times report paints a different picture — one of a bad businessman who successfully played a good one on television. Some of his early real estate investments are still making him money, and there’s considerable income from his minority interest in property managed by someone else. But over the past 20 years, most of his profits, more than $400 million, came from “The Apprentice” or licensing deals. That income, however, was almost completely absorbed by gargantuan losses at the actual businesses where he had to make things happen in the real world.
How could the numbers grow so large? The most charitable and, to my mind, likely explanation is that Trump spent too long playing a businessman and could no longer distinguish his reality show from reality.
So instead of tucking those hundreds of millions into safe, boring investments where they’d keep throwing off income forever, Trump bought a string of golf courses, then lost buckets of money running them. Dubious tax strategies and aggressive borrowing helped keep the leaky boat afloat. But now, he has hundreds of millions of debt coming due in the next few years, and, if he loses his audit dispute with the Internal Revenue Service, potentially a nearly $100 million tax bill to boot.
All this helps explain his decision to run for president, with all the scrutiny that comes with it. After all, scrutiny is great news for a showman looking to revive a flagging brand as his income from “The Apprentice” declined.
Quite possibly this was the worst business decision Trump ever made. (And that’s saying a lot.) Being president has temporarily paused many of his problems, such as the audit. But in four months, or four years, Trump will leave office, and all his old problems will resume, along with some new ones.
NBC cut ties with him as a result of his campaign, and he has thoroughly alienated the left-leaning media bosses to whom he might pitch a new reality show. His presidential celebrity has invited potential lawsuits that could prove expensive and poisoned his brand for half the population. Income from his fans (or sycophants) may have temporarily allayed those losses, but the foreign money, at least, will probably end when his presidency does. On top of all that, the pandemic that Trump bungled has hit real estate, travel and leisure — the primary sectors in which he’s invested — particularly hard.
Of course, there will be new opportunities in conservative media, and surely Trump will try to capitalize on them. Yet there’s reason to wonder just how lucrative such opportunities will prove.
Trump’s greatest appeal to conservatives has never been the man himself, but rather the vehement reaction he evokes from the left. Once Trump is no longer president, the left will move on to other things, and with half his audience gone, the other half may lose interest, too. So there’s still some reason for Trump’s critics to hope that they may, eventually, see a little bit of justice after all.
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Read more: Max Boot: Trump’s taxes show why he is desperate to stay in office Catherine Rampell: Trump’s long-hidden tax returns make him look like a terrible businessman, or a cheat. Probably both. Greg Sargent: Stunning new revelations about Trump’s taxes also expose a hidden weakness Alexandra Petri: Campaign-approved responses to the Trump tax returns Catherine Rampell: There’s another whistleblower complaint. It’s about Trump’s tax returns.
