NY Times Calls out Delaware
June 1st, 2009
The NY Times took a look at Delaware’s status as a potential tax haven this weekend. From the Saturday issue:
North Orange, a ho-hum thoroughfare in Wilmington, Del., is, on paper, home to more than 6,500 companies. Many of them are empty shells. They make nothing and sometimes employ just a lone clerk. But all are there for the same reason: to help corporations avoid paying taxes in other states.
The Obama administration has riled corporate America by cracking down on secretive offshore tax havens. But now a big onshore refuge — Delaware — is drawing scrutiny, too.
It’s nice to see some of the US’s onshore tax havens are beginning to be scrutinized. Many offshore tax havens have used the tax laws in Delaware (and other states like Nevada and Wyoming) as an excuse to maintain their own banking secrecy laws. Their argument is that the US is being hypocritical. And the US is hypocritical to an extent. But hypocrisy, though making the hypocrite look bad, does not actually diminish the strength of the argument. Regardless of the laws in Delaware; Panama, Switzerland, and the Cayman Islands are still tax havens.
Nevertheless, the US could certainly gain a lot of political capitol by shutting down its onshore tax havens (aside from the fact that it’s the right thing to do).