Freakonomics Radio 539. Why Does One Tiny State Set the Rules for Everyone?
78 snips
Apr 13, 2023 
Hal Weitzman, author of "What's the Matter with Delaware?" and a University of Chicago faculty member, discusses Delaware's unique allure to corporations. He explores its lenient incorporation laws, which draw in businesses seeking anonymity and tax benefits. Weitzman addresses the state’s role in facilitating both legitimate ventures and questionable activities. The conversation raises critical questions about transparency, the efficiency of Delaware’s legal system, and the influence of its Chancery Court, highlighting a complex relationship between corporate interests and democratic principles.
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Weitzman's Interest in Delaware
- Hal Weitzman became interested in Delaware's corporate landscape during his time as a financial reporter.
- He noticed Delaware's importance but found a lack of inquiry into the reasons behind it.
Delaware's Corporate Appeal
- Delaware attracts many companies due to various reasons, including its specialized court and tax policies.
- There's no single reason for Delaware's popularity.
WorldCom's Tax Dodge
- WorldCom exploited the "Delaware Loophole" by classifying "management foresight" as an intangible asset.
- This allowed them to avoid taxes in other states by funneling profits through Delaware.
