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Analysis: Trump faces financial time bomb thanks to business decisions

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  • President Trump’s image as a business magnate took a huge blow from leaked information published by The New York Times. 
  • It shows huge losses at Trump’s businesses, which meant he has paid virtually no income tax for years. 
  • It also shows that he personally owes around $421 million, a figure which could increase by a further $100 million more if he loses an ongoing court case against the IRS.
  • Trump’s debts and refusal to divest himself while in office mean that he is uniquely exposed to bribery and foreign influence, as his critics have noted. 
  • Visit Business Insider’s homepage for more stories.

Donald Trump launched his bid for the presidency in 2015 with a typically showy stunt, descending a golden elevator in Trump Tower, Manhattan, to make the case that his business savvy made him an ideal candidate.

In his speech launching the campaign, Trump boasted that his vast wealth meant he was not susceptible to pressure from special interests. 

“I don’t need anybody’s money. I’m using my own money… I’m really rich,” he told supporters.

That image has since been badly eroded by a series of reports on the precarious state of his finances. The latest blow came when The New York Times published a detailed exposé on Sunday based on documents spanning decades.

Far from the seeming plutocrat of June 2015, the Times report shows that when Trump launched his presidential bid he had for years been losing hundreds of millions of dollars. 

Such were the losses that, in 11 of the 18 years of records obtained by the Times, Trump paid no income tax at all — including those just before his campaign.

Trump has denied paying so little tax, and a Trump Organization spokesman asserted that he had in fact paid many millions. They have not offered any specifics.

The figures cited by the Times paint of a picture of  Trump as a celebrity on the wane, spending $70,000 on his trademark hairdo, written off as one of many business expenses. 

They lend credibility to the claim by his former attorney, Michael Cohen, that his presidential bid was a publicity stunt, and that he had no serious expectation of winning. 

But Trump’s financial woes aren’t just a personal matter. They also affect the integrity of the US government and the democracy it oversees, especially as Trump did not fully divest himself when taking office.

Contained in the records is evidence of vast debt — including $421 million for which Trump is personally liable, due over the next four years. 

Should he lose a long-running battle with the IRS, which claims he improperly claimed a $72.9 million tax rebate, he could end up owing a further $100 million, including interest and penalties. 

Combined, the president could find himself on the hook for more than half a billion dollars.

Far from being immune to outside financial pressure, Trump appears uniquely vulnerable.

The records obtained by the Times show Trump’s income from several of his businesses sharply increasing after his 2016 victory, with foreign powers among those vying for favor as they patronize his real estate and hospitality businesses. 

They show that Trump is reliant on income from abroad, including interests in Turkey and the Philippines, both ruled by strongman autocrats. 

Having once claimed his enormous wealth was a rare source of strength, it is hard to see Trump’s indebtedness as anything but the opposite.

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