“Trump’s business model, which goes something like this: Launch several businesses, many of which hemorrhage millions of dollars each year, and use the publicity from those businesses to make money on personal branding. The latter is highly profitable, earning Trump $427.4 million between 2004-2018. The losses from the former—his hotels and resorts for instance—are then used to largely offset his tax liability.
The Times’ report does erode the savvy businessman brand Trump has sought to cultivate for himself, both commercially and as a candidate for office. The president is not necessarily the astute entrepreneur he claims to be, though he may be uniquely skilled at making money by wasting money. His most high-profile business successes—his golf courses—have reportedly lost $315 million since 2000. The Trump International Hotel in Washington, D.C., just opened in 2016, has already lost $55 million, both numbers according to the Times.
Losing money for a living is certainly an unorthodox business model, but that doesn’t make it illegal.
Trump’s deductions don’t stop there, however. There’s also the $9.7 million tax credit Trump claimed to renovate the Old Post Office building in Washington, D.C., which would later become the aforementioned Trump hotel. That fell under the historic preservation tax clause, an entirely legal tax incentive meant to encourage the redevelopment of old structures.
It could be legally problematic, or just another revealing symptom of U.S. tax law, that Trump has claimed millions of dollars in unspecified consulting fees on various business projects, which typically amounted to 20 percent of his income, according to the Times. Ivanka Trump was allegedly the recipient of hundreds of thousands of dollars in such consulting fees. The president also declared $1.4 billion in business losses in 2008 and 2009. An IRS audit is ongoing.”
“Our tax code, which Bishop-Henchman says was written in the style of a “phone book,” is replete with overly complex rules and regulations meant to influence the public’s economic behavior. Former Vice President Joe Biden is no stranger to this. “I have nothing against Amazon,” he wrote in June of 2019, “but no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers. We need to reward work, not just wealth.” The tech behemoth paid no federal taxes in 2018 after making use of legal tax incentives established by Congress, of which Biden was a member for 36 years. For example, Amazon invested $22.6 billion in research and development in 2017, something the legislature hopes will spur job creation and economic growth.”