It's not (just / only) taxes - Delaware has for a century or more not imposed changing rules and regulations on businesses registered in its state. It has bas

It's not (just / only) taxes - Delaware has for a century or more not imposed changing rules and regulations on businesses registered in its state. It has basically left things well alone. If this was outside the USA then Delaware would just be some tiny island tax haven. But it's a full fledged State in the most powerful country in the world. Businesses in Delaware still have to abide by every Federal law and regulation, and every Federal tax. It's not (quite) a no laws, no rules hideaway. What they don't have to do is guess which State's local problems are going to hamstring them in five years. Delaware incorporation gets you in the USA market at the national level. National America laws affect you but local State politics you can safely ignore. And be confident that the changes coming nationally will be clearly signalled in California or Texas first. Yes there is tax arbitrage opportunities - but we are seeing similar things in Netherlands or Ireland in the EU. And when things got too out of hand then the other states would all "have a quiet word" with Delaware. Similar to how the Dutch Irish sandwich is it seems coming to an end. So yeah, businesses like stability and only having to look in one direction, much more than low taxes but more complex environments. Edit: It's worth reading up on the Dutch / Irish sandwich. In some ways yes it is egregious (and yeah a lot of the time it is - franchises that claim all the profit resides in a logo or a policy book - we all know that's crap). But that's a question of degrees - if I sell McDonalds burgers I will make more than selling some unbranded stuff. So IP does have value. Now let's say I am licensing wind turbine generators for a wind farm - designed in UK, built in Germany, installed in France by a Dutch company with Spanish investors. Whose laws apply to the licensing agreement ? This gets really hard really quickly - which takes us back to Janet Yellen and minimum OECD tax rates. By stopping the race to the bottom, it does not matter so much - tax is paid, and gets shuffled in somewhere. I know I am banging on but, getting outraged by tax dodges like this will prevent us taking the big wins - if there is a global minimum tax rate a huge amount of wasted effort on tax avoidance goes away, and it opens up real possibilities for clamping down on tax evasion. Companies in Delaware mostly pay tax in the right range - and those that don't, trust me, the way to deal with it is to hire more IRS agents - probably the only branch of Government that has a 4-10x ROI year on year :-) tl;dr tl;dr There is an order to fixing taxes either globally or between states. First set a global minimum corporate tax rate (see OECD/Yellan). Then clamp down on tax evasion by forcing beneficial ownership to be made public globally. Only after all that is it worth fighting over who get what cut of the pie. There is no global tax pie right now - we need to bake it before we discuss cutting it.