3 ms·

Like Delaware, the scumbag state - a tax haven

by yboris 6y ago

fastball 6y ago
How is Delaware a tax haven?
- yboris 6y ago
  https://www.theatlantic.com/business/archive/2016/10/dont-blame-delaware/502904/ https://www.theatlantic.com/business/archive/2016/10/dont-bl... > Delaware doesn’t tax “intangible assets,” and this encourages companies to move parts of their business to Delaware to avoid taxes in other states. This has led to Delaware being labeled a “tax haven.” See also: https://www.investopedia.com/articles/personal-finance/092515/4-reasons-why-delaware-considered-tax-shelter.asp https://www.investopedia.com/articles/personal-finance/09251...
  - gruez 6y ago
    I don't get it. I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?
    - logifail 6y ago
      > I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this? Company transfers intangible asset to subsidiary in Delaware, "trademark or naming rights"[0], its locations elsewhere pay the Delaware subsidiary for the use of those rights, lowering their profits(?), and the Delaware subsidiary doesn't have to pay tax on that income and resulting profit? [0] https://www.theatlantic.com/business/archive/2016/10/dont-blame-delaware/502904/ https://www.theatlantic.com/business/archive/2016/10/dont-bl...
      - gruez 6y ago
        That'd make sense if delaware had a low corporate tax rate, but it doesn't[1]. If you wanted to relocate your profits to a low tax jurisdiction, you'd want something like north carolina (2.5%) not delaware (8.7%). [1] https://taxfoundation.org/state-corporate-income-tax-rates-brackets-2020/ https://taxfoundation.org/state-corporate-income-tax-rates-b...
        deleted 6y ago
        [deleted]
        logifail 6y ago
        ...because [under the "loophole" / arrangement we're discussing] Delaware doesn't tax (any of!) the income from those intangible assets[0]? https://udel.edu/~pollack/Downloaded%20SDP%20articles,%20etc/other%20articles/Delaware%20-%20Tax%20Haven%20or%20Scapegoat%20in%20State%20Tax%20Notes%2009-09-2013.pdf https://udel.edu/~pollack/Downloaded%20SDP%20articles,%20etc... > if delaware had a low corporate tax rate Hard to set the corporation tax rate (for income on intangible assets) any lower than zero.

Like Delaware, the scumbag state - a tax haven

by yboris 6y ago

Like Delaware, the scumbag state - a tax haven

fastball 6y ago

How is Delaware a tax haven?

yboris 6y ago
https://www.theatlantic.com/business/archive/2016/10/dont-blame-delaware/502904/ https://www.theatlantic.com/business/archive/2016/10/dont-bl... > Delaware doesn’t tax “intangible assets,” and this encourages companies to move parts of their business to Delaware to avoid taxes in other states. This has led to Delaware being labeled a “tax haven.” See also: https://www.investopedia.com/articles/personal-finance/092515/4-reasons-why-delaware-considered-tax-shelter.asp https://www.investopedia.com/articles/personal-finance/09251...
- gruez 6y ago
  I don't get it. I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this?
  - logifail 6y ago
    > I thought corporations were taxed on profits and not assets? How do tangible/intangible assets factor into this? Company transfers intangible asset to subsidiary in Delaware, "trademark or naming rights"[0], its locations elsewhere pay the Delaware subsidiary for the use of those rights, lowering their profits(?), and the Delaware subsidiary doesn't have to pay tax on that income and resulting profit? [0] https://www.theatlantic.com/business/archive/2016/10/dont-blame-delaware/502904/ https://www.theatlantic.com/business/archive/2016/10/dont-bl...
    - gruez 6y ago
      That'd make sense if delaware had a low corporate tax rate, but it doesn't[1]. If you wanted to relocate your profits to a low tax jurisdiction, you'd want something like north carolina (2.5%) not delaware (8.7%). [1] https://taxfoundation.org/state-corporate-income-tax-rates-brackets-2020/ https://taxfoundation.org/state-corporate-income-tax-rates-b...
      - deleted 6y ago
        [deleted]
      - logifail 6y ago
        ...because [under the "loophole" / arrangement we're discussing] Delaware doesn't tax (any of!) the income from those intangible assets[0]? https://udel.edu/~pollack/Downloaded%20SDP%20articles,%20etc/other%20articles/Delaware%20-%20Tax%20Haven%20or%20Scapegoat%20in%20State%20Tax%20Notes%2009-09-2013.pdf https://udel.edu/~pollack/Downloaded%20SDP%20articles,%20etc... > if delaware had a low corporate tax rate Hard to set the corporation tax rate (for income on intangible assets) any lower than zero.