I wonder if Ritchie knows this?

Nor is there, fifthly, any sign in here that the US is going to get to grips with the fact that states like Delaware, Nevada and Wyoming produce secret corporations available for tax abuse behind total veils of secrecy on such an industrial scale that it makes the British Virgin Islands like like a bunch of amateurs. The contribution to tax abuse that these US states makes is enormous.

Those corporations are subject to the US tax system of course, the Federal one. They’re useful for dodging state tax systems, something which doesn’t really concern non-Americans.

There’s a different issue with partnerships …….but that’s partnerships, not corporations.

12 thoughts on “I wonder if Ritchie knows this?”

  1. “There’s a different issue with partnerships”

    The Murphatollah knows he is on thin ice if he complains about partnerships and tax secrecy………so he generally doesn’t….. 🙂

  2. Sorry Tim, credit where credit is due. Murphy is well aware of partnerships and the tax and other nefarious advantages they bring, very well aware.

  3. @ Ironman
    Why do you suppose that Tim does *not* think that Murphy is well aware of the asdvantages of partnerships?

  4. From the LHTD’s blog this morning:

    City will be from 1 November this year a part of an EU funded Horizon 2020 project that has been given the name COFFERS (Combating Financial Fraud and Empowering Regulators).

    TRUK is a parody site, isn’t it? Own up guys – which one of you is Richard Murphy?

  5. Having foolishly gone to listen to Murphy at the Edinburgh Book Festival, he was certainly unaware of tax arbitrage within the US, citing its absence in support of Scotland not needing to fear raising tax rates.

  6. Delaware, Nevada and Wyoming produce secret corporations available for tax abuse behind total veils of secrecy

    This doesn’t even make sense. Those states produce corporations the same way everyone else does, subject to the same disclosure every other corporation in the US is. The only difference is that the *state* taxes levied against them and the *state specific* regulation they face – in that state – are lower than elsewhere in the US and so makes those jurisdictions more attractive to register US corporations in.

    None of that should have any effect whatsoever on a corporations international operations. The federal tax is the same, the tax (and tax reporting) obligations in other jurisdictions is the same.

    They just get out of paying a little more tax at the state level and benefit from a slightly easier registration procedure.

    What is this man going on about?

  7. ‘Murphy is well aware of partnerships and the tax and other nefarious advantages they bring, very well aware.’

    Nefarious??? Explain how following the law can be nefarious.

  8. He’s referring to LLCs or limited liability corporations. These are tax transparent for US tax purposes. Provided the members are non-US tax resident and the LLC doesn’t have effectively connected income there is no federal tax. Incorporating in a state where there is no state tax allows you to incorporate a LLc that is US tax exempt. The downside is that such LLC do not benefit from US dta’s.

  9. The main reason that companies incorporate in Delaware is because of the flexibility of Delaware corporate statutes relative to those of other states and not really a tax issue, so Murphy is wrong. While some other states have followed Delaware’s model and have sought to make their own statutes similar to those of Delaware, the head start of Delaware means that it has developed a much larger body of law around corporate issues, along with the relevant skills with judges, lawyers, law firms, etc., who are thoroughly conversant with these issues. It is a classic case of a virtuous circle: providing a good environment for a specific activity, which leads to more of the activity being conducted there, which leads to more services being available for the activity, which means these services become better and cheaper, which means more of the activity is being conducted there…

    You get my drift.

Leave a Reply

Your email address will not be published. Required fields are marked *