Trump's no genius if he didn't make money in the '90s boom, academic says

Republican presidential nominee Donald Trump smiles during the Presidential Debate at Hofstra University on September 26, 2016 in Hempstead, New York.
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Republican presidential candidate Donald Trump can't be that good a businessman if he didn't make money during a relatively comfortable period for the U.S. economy, according to Brian Klaas, a fellow in comparative politics at the London School of Economics.

"He's not a very good businessman if he lost a billion dollars in the boom of the 1990s. And this is what his candidacy is predicated upon right? That I alone can fix this. He literally said those words at the Republican convention," he told CNBC Tuesday.

"It doesn't take a genius to make money in the 1990s when you've been given millions and millions of dollars," he added. Trump has previously been criticized for inheriting $200 million from his father but has since denied that claim and said he "got very, very little" at a speech in February.

Klaas's words come as Trump faces fresh criticism for his business and tax history following a report by The New York Times over the weekend that his 1995 tax return showed a $916 million loss after a string of business difficulties. The return, verified by the man who prepared it, showed Trump could have been legally shielded from income tax for up to 18 years after that.

Was Trump right to deduct losses from his tax bill?

Responding to the report on Monday, Donald Trump said at a rally in Colorado that he "brilliantly" used tax laws to benefit himself and his companies. Rudy Giuliani, the former New York mayor who is now one of his advisers, has said Trump is a "genius" for figuring out how to minimize his tax bill. Meanwhile, his rival for the White House Hillary Clinton slammed Trump for his 1995 tax return on Monday, asking, "What kind of genius loses a billion dollars in a single year?"

Klaas told CNBC the Republican presidential candidate should also be releasing his tax returns and be transparent with the American people if he wants to lead the country. Jan Halper-Hayes, chair of Republicans Overseas, meanwhile defended the real estate magnate and former reality TV star.

"If he had projects going (in the 1990s), the interest on those projects are tax deductible - that is part of the loss," she told CNBC Tuesday.

"It's not because he ran a bad business, it is because the cost of expanding could be in there, the salaries of people, every nail, every screw. I redid a home and I could deduct every nail, every screw, it came off of the profit I made because it was the cost of doing business." she added.

—CNBC's Jacob Pramuk contributed to this report.