We've all been treated to the spectacle of Donald Trump's tax issues the past week. He lost just shy of $1 billion in 1995, and used that loss against subsequent gains. The talking heads and various surrogates have been flogging his tax avoidance pretty much non-stop. They need to stop. It's not the relevant story, if only because it's completely legal.
This part of the tax code is about a hundred years old. Its purpose is to help troubled companies rebuild and rebound from their difficulties. It has worked pretty well. It has helped closely held businesses and smaller public companies alike. I have some understanding of this process. No one that I know who has had to take advantage has done so happily. It's not a good thing. Certainly calling Trump "a genius" for using the NOL is entirely bogus. You use the NOL because you face catastrophic failure and this is a potential lifeline. That lifeline may not be available, for example, if your lender won't agree to support you going forward. Most lenders want to do that but there are some, I won't mention names, PNC, that lack the foresight and intelligence, to understand the benefits of nurturing a business back to health thereby preserving those jobs and fostering that company contribution to the commerce of the nation. So, getting back on subject, no one is happy about being in the position to generate an NOL. That Trump now says he wanted to use an NOL is either disingenuous or dangerously manipulative of the tax code. The thing is, it's legal. So that's not really the issue either.
The issue is, how the fuck do you lose a billion dollars on a casino? It's a fucking casino! In 1995, the economy was booming and Atlantic City was expanding, so blaming the economy for the failure is obviously bogus. The only way a casino could lose that kind of money is through gross mismanagement. So the issue here is Donald Trump's business competence. It appears that he hasn't got any. Don't be fooled by all the buildings with his name on them, that could be licensing agreements rather than any demonstration ownership.
