first worst state
Few people realize it, but tiny Delaware is a greedy leeching cesspool. How can a small state with few natural resources and no major cities get away with having no state income tax or sales tax? By living off of everyone else.
It all began in the 1970s when Delaware hatched a scheme to encourage corporations to re-incorporate in the state. Delaware offered extremely low corporate taxes and almost non-existent charter regulations, and only required the presence of a post office box. Corporations lined up to incorporate in the state from elsewhere, including half of the Fortune 500, denying the rest of the states a centuries old tax base, and enriching Delaware. The state reaped the revenue without actually having to provide any services that the actual physical presence of businesses might require. Today 300,000 corporations are based in Delaware, that is roughly one for every two citizens!!
Furthermore, Delaware alone among the states repealed its usury laws, which govern the amount of interest that can be charged. Most major lending institutions moved their base there, and so began the speculative spending boom of the 90s. Today, every time Americans pay their credit card debt, a piece of it goes to the Delaware treasury.
The consequences of the lax coroporate regulation that Delaware has used to lure businesses to its PO boxes are, of course, real. For instance, in 2001 the Senate Subcommittee on Investigations found that the Russian mob laundered more than one billion dollars through a series of Delaware front corporations
But the leeching doesn’t stop there. The Delaware Turnpike is a mere 11 miles of I-95, cutting an unpopulated corner of the state where few locals drive. And what are the tolls? A whopping 18 cents per mile! (compared to five cents per mile in adjacent New Jersey and four cents per mile in Maryland). On top of this is another $3 for the Delaware Memorial Bridge. Once again, out of staters are being bilked to fund the Delaware treasury.
Some other damning facts:
- During the constitutional convention, Delaware threatened to join with a foreign power if its demands for a federal legislature not based on state population were not met. Today one out of every 350,000 Delewarians gets a vote in the Senate, as opposed to one out of every 15 million Californians.
- Delaware was the only state that didn’t ratify the 13th, 14th and 15th amendments to the Constitution.
- Delaware’s Jim Crow laws were not repealed until the late 60s.
- Delaware did not abolish corporal punishment until 1952.
It's time to give this state back to Sweden.
Inspired by Enemy Within: The Case Against Delaware by Jonathan Chait, The New Republic 8/19/02.