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this post was submitted on 12 Oct 2023
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Explain Like I'm Five
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If you have a business asset, you can take out loans using that asset as collateral, and then use the loaned money to go do other business things. If you exaggerate the value of the asset, you can take out bigger loans.
(Even if you repay the loans later, you've taken advantage of the banks who made the loans, because they only have so much money to lend out to businesses.)
If you own real-estate, you owe property tax on it. If you understate the value of your real-estate, you can (for a while) get away with paying less in taxes.
Mr. Trump and his companies did both of these things. They exaggerated the value of their assets when it came time to get loans, and they understated the value of those same assets when it came time to pay taxes on them.
Even if you repay the loans later, you exposed them to more risk than they agreed to take.
And they probably gave him a lower interest rate due to the perceived lower risk.