Trump's Taxes Show Something’s Wrong With the Capital System
We keep throwing too much good money after bad.
The picture of his financial situation is getting clearer.
Photographer: BRENDAN SMIALOWSKI/AFP/Getty Images
The world is finally learning the details of President Donald Trump’s taxes. The revelations raise all kinds of issues, from the president’s own conflicts of interest to the degree to which the wealthy are able to game the tax system. But Trump’s taxes also show there are potentially serious problems in the way the U.S. financial system allocates capital.
Over the past decade, Trump lost large amounts of money on a series of businesses — golf courses, hotels, resorts, and so on. These were operating losses, rather than losses from investment in business growth. While it’s possible those losses were overstated with creative accounting, the overall takeaway is that Trump isn’t very good at creating profitable businesses. What’s more, he has hundreds of millions of dollars in loans still outstanding.