Can someone please explain something to me?

[Brigid]

Tonight Rachel Maddow was talking about corporations locating themselves, on paper anyway, in states like Wyoming and Delaware for tax purposes. My question, which she did not address: It's obvious what the companies get (low taxes) but what do the states which allow this get?

[lonestarnot]

1. A couple of jobs maybe.

[LynneSin]

7. not necessarily - here in Delaware it's ALOT of jobs

:D

[elleng]

2. Voluminous 'incorporating' taxes/fees.

p.s., Delaware famous for this.

[RaleighNCDUer]

3. A few very rich people spreading cash around the State house. nt

[EFerrari]

9. FTW

[PoliticAverse]

4. Incorporation fees and...

In addition, Delaware has used its position as the state of incorporation to generate revenue from its abandoned and unclaimed property laws. Under U.S. Supreme Court precedent, a state of incorporation gets to keep any "abandoned and unclaimed property", such as uncashed checks and unredeemed gift certificates, if the corporation does not have information about the location of the owner of the property.<7> Delaware is becoming increasingly aggressive in auditing and assessing companies for unclaimed property. For example, it has deputized sister states to act as contingency fee auditors for unclaimed property.

A state may levy, however, a franchise tax on the corporations incorporated in it. Franchise taxes in Delaware are actually far higher than in most other states which typically charge little or nothing beyond corporate income taxes on the portion of the corporation's business done in that state. Delaware's franchise taxes supply about one-fifth of its state revenue.<8>

( From: http://en.wikipedia.org/wiki/Delaware_General_Corporation_Law )

[Cresent City Kid]

5. Perhaps they hope it has a gravitational effect

"Look, we have all these businesses here", in the hope that actual brick and mortar businesses will be attracted.

[LynneSin]

6. Simple - jobs

Well I can't speak for Wyoming because there is little appeal for major corporations in states like Wyoming, so perhaps there it's more of just a office setup somewhere just for the tax credit.

But in Delaware we actually get the corporations setting up big offices here bringing thousands of jobs mainly into the northern part of the state. So even though their taxes are low they are putting alot of jobs into the area and alot of benefits from having big companies in our city. Our big thing is banking and for the banks - they have low cost of running the business with easy access to some of the biggest cities on the East Coast. And honestly, living in Wilmington DE these past 10 years I can honestly say that the downtown is starting to make a revival, something that would never had happen if we didn't find a way to attract these businesses.

BTW, if it means anything, my property taxes are pretty reasonable - at least compared to the states around me (especially NJ). We also don't have any sales tax. AND we also have civil unions and medical marijuana just passed too - we're a great blue state!

[gateley]

8. You can't fault a State for taking advantage of the laws in

place and generating income for its residents and revenue for the State. I'm surprised more States don't do something similar.

[SwampG8r]

10. i saw this on my homepage

its yahoo news but it explains the issue well
http://news.yahoo.com/special-report-little-house-secrets-great-plains-113759191.html