Rosalea Barker: The Omega and the Alpha

It’s a curious fact that the “home states” of President and Vice President of the United States are the last and the first—Hawaii and Delaware respectively. (Their joint state abbreviations spell the word “HIDE”, but we won’t dwell on the possible significance of that!) On December 7, 1787, Delaware delegates were the first to ratify the U.S. Constitution; Hawaii was admitted to the Union on August 21, 1959.

Anyways, it gave me the idea that I might write something each week about what I’ve learned about each state since living here. Delaware is first up. You can look up its history for yourself on the Secretary of State’s website www.delaware.gov.

Delaware’s greatest significance in the day-to-day lives of people living in the U.S. is its Court of the Chancery. According to Lewis J. Black, Jr., that court “is the reason close to a million businesses make Delaware their legal home, including more than one-half of the Fortune 500 companies.”

The Court of the Chancery was established in 1792. It has no jurisdiction over criminal and tort cases, allowing it to focus solely on corporate law. The body of case law it has built up over the last 200 years is mined by lawyers representing clients incorporated—or about to be so—elsewhere in the nation.

Lewis S. Black, Jr.—named one of the fifty leading securities lawyers in the United States by the National Law Journal—lists in the booklet “Why Corporations Choose Delaware” several reasons as the source of the state’s popularity. Among them is this: “It includes the Secretary of State’s Office which thinks and acts more like one of the corporations it administers than a government bureaucracy.”

The Delaware General Corporation Law, Black writes, is “an enabling statute intended to permit corporations and their shareholders the maximum flexibility in ordering their affairs. As such, it does not purport to be a code of conduct. Indeed, it is written with a bias against regulation.”

To add to the paradise Delaware is for financial institutions, “investment and holding companies maintaining and managing intangible investments, and collecting and distributing income from such investments or from tangible property outside Delaware, are exempt from State corporate income tax,“ according to the State’s official website. And if you earn over $60,000 a year, your personal tax liability is $2,943.50 plus 5.95 percent of your income over the 60k. Nor does the state impose any property taxes; only counties do.

So, when that envelope comes in the mail demanding payment of credit card debt and the address for billing inquiries is Wilmington, DE, or when you see again that picture of Joe Biden giving a speech in Wilmington as he is about to board the Obama train to DC with the Chase building in the background, wonder not what your country can do for you, but what this state and its elected officials have done to your country.

rosalea.barker@gmail.com

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