Today the New York Times explores why the State of Delaware is the incorporation capital of the world:
Big corporations, small-time businesses, rogues, scoundrels and worse — all have turned up at Delaware addresses in hopes of minimizing taxes, skirting regulations, plying friendly courts or, when needed, covering their tracks. Federal authorities worry that, in addition to the legitimate businesses flocking here, drug traffickers, embezzlers and money launderers are increasingly heading to Delaware, too. It’s easy to set up shell companies here, no questions asked.
As the article explains, unlike many states, Delaware has no budget deficits and no problems meeting its citizenry’s needs despite having no sales tax and a very modest income tax as the state brought in over “roughly $860 million in taxes and fees from its absentee corporate residents in 2011. That money accounted for a quarter of the state’s total budget.”
This is what happens when states create an environment that encourages business; their states and citizens thrive leading to greater prosperity for everyone. I lived in Delaware for nearly three years and can say that it was a very affordable and lovely place because of the policies put in place to foster business.