With the US presidential election less than 40 days away, the press is abuzz with the latest information on Donald Trump’s income history — and the conclusions we can derive from his taxes (or lack thereof). According to the widely read New York Times article, Trump recorded a net personal loss of almost $1 billion in 1995, which could have enabled him to offset his income taxes for a very long time afterwards.

The reason why Trump was able to do so is that he records his income not like any other ordinary household, but instead as a kind of individual entrepreneurial venture. The net loss was probably generated by various business partnerships of which he was part of, notably in real estate and casinos, whose expenses that year were (much) higher than income…