I'm a Delawarean, and I have done research and reporting about the state's unique role in corporate America.
You may wonder why two-thirds of the Fortune 500 are incorporated in Delaware. Is it because the cost of incorporation is lower than in other states, or because corporate tax rates are lower? Those are factors, but they are not the primary reason. The primary reason is risk avoidance, and in particular legal risk avoidance.
Delaware benefits from a flywheel effect: Because so many companies are incorporated in the state, its Chancery Court has a more developed set of case law than other states, and so outcomes of lawsuits involving corporations are more predictable -- which makes it an even more attractive place to incorporate, which continues the flywheel effect.
The down side is that the state is incredibly dependent on corporate licensing fees and escheatment. States like Nevada have, in recent years, been competing against Delaware as a corporate haven, and if we start to see a significant migration, we'll be in a real pickle, because the state imposes no sales tax and has relatively low property taxes.
abtinf 10 minutes ago [-]
Off topic: I’ve never seen a flywheel analogy that actually understands what a flywheel is. People love to use it to describe a forever growing thing, when it’s actually just a buffer.
antisthenes 2 minutes ago [-]
In this case, the flywheel analogy only demonstrates is that there is low friction in the legal system aspect.
If we are talking about a flywheel as an energy storage, low friction is a key component of its ability to store energy as a buffer. If this was not the case, the flywheel would lose its energy quickly on its own and the buffer would be gone.
> People love to use it to describe a forever growing thing, when it’s actually just a buffer.
A thing has other characteristics other than its intended purpose. Your assumption that you need to use intended purpose for a successful analogy is false.
tylermk04 4 minutes ago [-]
Ah yes, I too have noticed the "prevalence of flywheel-analogy-misuse" flywheel.
delichon 31 minutes ago [-]
Alaska gets a huge portion of its revenue from taxes on extracting oil and gas. This is a model that any state could use on data centers extracting compute from local resources. And if demand for compute is actually heading up the Kardashev scale, it could eventually fund the whole state and subsidize resident incomes. It would act as a hedge against possible disruptions by AI.
estearum 23 minutes ago [-]
Land Value Tax does this with effectively zero enforcement complexity and across all forms of communal wealth creation (which ultimately gets baked into land values).
barumrho 14 minutes ago [-]
Could you explain this?
I thought the idea of Land Value Tax was that the value of land gets taxed regardless of how much value is generated by use of that land. (e.g. a vacant lot is taxed the same as a lot with rental properties built on top given everything else equal.)
smallmancontrov 15 minutes ago [-]
"Datacenters" is needlessly narrow -- as capital eats the world, we need to tax capital. Simple as.
We already tax houses, and by comparison stocks are more liquid than a firehose and easier to value than a $2 bill. There is no excuse.
As I have grown my small business, I have come to an appreciation for how comically lopsided the tax code is to push all of the taxes out of the invest/return economy and into the work/consume economy. It's really quite something. Anything to avoid the right side of the Kuznets Curve!
justindz 12 minutes ago [-]
Florida passed their ballot initiative (https://www.msn.com/en-us/money/other/what-the-new-florida-h...) to begin exempting non-school portions of property tax (a bit over 1/3 of state revenue). This is a concern in my industry, which derives budgets primarily from property taxes. But, more generally: what is the plan for the revenue shortfall? Any Floridians have insight? Does FL not need this money, assume they will make it up in a sales tax because of increased disposable income, or they are just fine with the services based on this revenue getting rinsed?
Den_VR 6 minutes ago [-]
Its a homestead exemption. Folks just living in their homes will be under less pressure to sell. Folks renting out homes will continue to pay full tax. With the behavior of property valuations, this seems rather humane.
kevin_thibedeau 2 hours ago [-]
They need to show distribution of federal funds because it is not fairly allocated.
gwerbin 36 minutes ago [-]
This is about tax revenue, not overall stock of usable funds.
kevin_thibedeau 25 minutes ago [-]
It's about the proportional distribution.
hbarka 1 hours ago [-]
Interesting as a percentage but convert the axis to actual dollars for the real story.
abeppu 1 hours ago [-]
But that would just show you some states are much bigger than others? I think per capita dollars, or normalized to that state's median income would be more informative.
beembeem 1 hours ago [-]
A few observations (these are all on a relative basis, as the chart shows):
- NH gets nearly 2/3 of its revenue from property taxes
- OR raises more of its revenue than CA in income tax
- TN/AZ are a close 2nd/3rd to WA in sales tax revenue
kristjansson 15 minutes ago [-]
Well, yeah, OR doesn't have a general sales tax so it's proportionally more dependent on income tax. vice versa for WA, no personal income tax so depends more on sales tax.
This is an interesting chart, but it really is showing one policy dimension - choice of tax base.
y-c-o-m-b 21 minutes ago [-]
Oregon, where we get taxed to hell on both income and property yet still have decrepit infrastructure, declining publicly funded healthcare(OHA), and poor education.
PyWoody 1 hours ago [-]
- NH gets nearly 2/3 of its revenue from property taxes
No sales or income tax will get you that. I sold my house and went back to renting because my town doubled my already ludicrously high property taxes.
apercu 36 minutes ago [-]
Won't you still be (indirectly) paying property tax, as your landlord needs to recoup?
throwup238 33 minutes ago [-]
Yes but you can get below market rents from owners who don’t have a mortgage to pay.
jolt42 22 minutes ago [-]
The WA sales tax I suppose explains why a fast food burger requires a down payment.
jolt42 18 minutes ago [-]
although it seems the workers aren't relying on tips as their salary, which hopefully means you can actually tip when it makes sense to.
y-c-o-m-b 27 minutes ago [-]
11% corporate income tax in Idaho surprised me, given how heavily conservative they tend to vote.
boguscoder 33 minutes ago [-]
Clicking “use this visualization” gives you image version that doesn’t cause seizures
somat 1 hours ago [-]
I suspect "other" is mining or equivalent natural exploitation(oil)
And pet peeve, personal income tax and corporate income tax are almost the same thing. With few exceptions the individual person does not pay their income tax, the corporation does, and for those exceptions the individual is the corporation. Income tax is really a sales tax on a corporation biggest expense, it's payroll.
yuliyp 57 minutes ago [-]
Corporate income tax is a very different thing from an employer withholding wages. Withholding is still considered the individual paying the tax, just they never get to hold the money. Corporate income tax is money the corporation pays based on its own income vs expenses.
throwup238 35 minutes ago [-]
You can also just go to your employer’s HR software and change withholding to 0% everywhere I’ve worked, giving you a bigger paycheck but moving the burden of paying the IRS on you.
what 26 minutes ago [-]
You still need to do the withholding or pay a penalty at tax time. I suppose you can pay quarterly instead of biweekly (or whatever), but is it worth it?
2 hours ago [-]
dorianmariecom 2 hours ago [-]
that website is cancer, just for an image
dh2022 2 hours ago [-]
That is why I read the HN comments before going to the site :). Thanks!
zugi 16 minutes ago [-]
Opening the page with uBlock Origin and NoScript, the image and article text show just fine.
Some sites these days won't show anything at all without Javascript, so I actually give the site kudos for working well with no Javascript.
Evidently Javascript causes cancer.
mindtricks 2 hours ago [-]
It is called the visual "capitalist" for a reason it seems.
devmor 2 hours ago [-]
I wonder if Delaware's massively oversized license tax portion is simply because so many companies incorporate there.
estearum 22 minutes ago [-]
Yes
logankeenan 1 hours ago [-]
A good portion of revenue is from property taxes. A property tax is a wealth tax. I always find the discussion interesting around wealth taxes on billionaires equity when the average worker has typically always paid a wealth tax on their largest asset.
mrkiouak 57 minutes ago [-]
A property tax is not a wealth tax, in any common meaning of 'wealth tax'. It's a property tax. The majority of people with real wealth own assets outside of property that they derive income from. Notably, the vast majority of people own property they do not derive income from, e.g. their homes.j
A tax on a home not deriving income does not fit any normal person's definition of a wealth tax.
tekla 54 minutes ago [-]
What? Property taxes are definitionally a wealth tax. It's also probably the most efficient/best one. It's also part of the common meaning of the wealth tax because its the one that most people experience.
People determined not wealthy enough to get a mortgage do not pay property taxes on a house they are not wealthy enough to own.
Those wealthy enough to own a house pay property taxes; ergo wealth tax.
Over the years different explanations were written down as legal justifications "why it's different than this other very similar scenario" but people of the past were just making something up to not look hypocritical; someone with the means is taxed more for the privilege is how it goes. Poor people don't pay taxes.
wredcoll 11 minutes ago [-]
> Poor people don't pay taxes.
Poor people (typically) don't pay income taxes.
This is why it's worth knowing the difference between progressive and regressive taxes.
hocusPokeUs 2 minutes ago [-]
You're doing that thing where you appeal to subtle complexity that doesn't exist as anything but a social trope; there is no real physical complexity to any of this; the complexity is all made up rhetorical gotchas.
It's like scaffolding out the Windows pipes screensaver in your head; endless bends and bends while no pipes actually exist. There is no spoon; it's just primates parroting the bird song they have been whistling since youth.
Sparkle-san 33 minutes ago [-]
The tax is the same regardless of the equity or "wealth". I can be underwater on my mortgage with a negative net-worth and still owe the same property taxes on someone with a comparable house and $2 million in the bank.
hocusPokeUs 6 minutes ago [-]
Yeah? And? You don't get a mortgage and pay the tax in the first place without being wealthy enough; poor people don't get to own a home and don't pay property tax (excepting for those in rentals who proportionally subsidize the payments the landlord makes).
It's fundamentally a tax on wealthier people among a community.
We really going to sit here in 2026 and pretend the people who wrote down all these rhetorical circumlocutions weren't just making up language to justify their supposed expertise/their social moat? All of the legal system was wielded by generationally rich families to screw have nots. The entire American system of history.
Strip away the ornamental language of the law and just see the ground truth; a person with means to buy the house pays a tax on it all. A poor person never pays a tax because they never own a home.
What is this? Why does everyone feel like they stepped out of the middle ages where dark tongues still exist and the ornate incantations of superstitious people still rule?
It doesn't need to be logically as complicated and intentionally obscured (in my opinion legalese has been to manipulate the illiterate which were the majority back in the day).
Such social conservatism is holding society back.
didgetmaster 42 minutes ago [-]
Property taxes are not wealth taxes. Two houses side-by-side with the same value, should have the same property tax assessed. One is owned outright. The other is mortgaged to the hilt and its 'owner' has very little wealth from it.
logankeenan 7 minutes ago [-]
Can you elaborate more on why you don’t think a property tax is not a wealth tax? My understanding is that a wealth tax is a tax on the value of an asset. The asset could be a variety things that have net worth
Also, not all states apply property taxes the same. In my state, my house is assessed often by the government and then my taxes rise based on the value of my house.
jayd16 31 minutes ago [-]
I wonder if we should pass a law where borrowing against an asset is a taxable event.
At least it closes the loop hole where you borrow against your stock and never pay taxes on it because you never sold it.
what 18 minutes ago [-]
I don’t understand this “loop hole”, who is giving loans that don’t have to be repaid? Surely the collateral will be sold eventually to repay the loan and service the interest?
quickthrowman 21 seconds ago [-]
Refinance the loan with another loan or just use a revolving credit account with no fixed term.
If your stock holdings are growing faster than inflation and the interest rate at which you are borrowing, it’s an easy way to monetize unrealized gains without a taxable event.
flowerlad 2 hours ago [-]
Here's a website that would have been significantly better if it had been written using AI. HN readers complain about "AI slop" but I would prefer AI slop over this site. Folks, if you are not motivated to make a decent page, please use AI.
somat 1 hours ago [-]
Just curious, because it looks fine to me(ad blocker?), but there were other comments saying how terrible it is, what is wrong with it?
Header large image, small pointless article, see also navigation. Sure nothing exceptional, but also, nothing offensive, looks like every other "news site" I have seen.
olsondv 37 minutes ago [-]
Turn off your adblocker and experience auto-playing and unmuted video ad popups that cover most of the display.
Rendered at 17:44:12 GMT+0000 (Coordinated Universal Time) with Vercel.
You may wonder why two-thirds of the Fortune 500 are incorporated in Delaware. Is it because the cost of incorporation is lower than in other states, or because corporate tax rates are lower? Those are factors, but they are not the primary reason. The primary reason is risk avoidance, and in particular legal risk avoidance.
Delaware benefits from a flywheel effect: Because so many companies are incorporated in the state, its Chancery Court has a more developed set of case law than other states, and so outcomes of lawsuits involving corporations are more predictable -- which makes it an even more attractive place to incorporate, which continues the flywheel effect.
The down side is that the state is incredibly dependent on corporate licensing fees and escheatment. States like Nevada have, in recent years, been competing against Delaware as a corporate haven, and if we start to see a significant migration, we'll be in a real pickle, because the state imposes no sales tax and has relatively low property taxes.
If we are talking about a flywheel as an energy storage, low friction is a key component of its ability to store energy as a buffer. If this was not the case, the flywheel would lose its energy quickly on its own and the buffer would be gone.
> People love to use it to describe a forever growing thing, when it’s actually just a buffer.
A thing has other characteristics other than its intended purpose. Your assumption that you need to use intended purpose for a successful analogy is false.
We already tax houses, and by comparison stocks are more liquid than a firehose and easier to value than a $2 bill. There is no excuse.
As I have grown my small business, I have come to an appreciation for how comically lopsided the tax code is to push all of the taxes out of the invest/return economy and into the work/consume economy. It's really quite something. Anything to avoid the right side of the Kuznets Curve!
- NH gets nearly 2/3 of its revenue from property taxes
- OR raises more of its revenue than CA in income tax
- TN/AZ are a close 2nd/3rd to WA in sales tax revenue
This is an interesting chart, but it really is showing one policy dimension - choice of tax base.
And pet peeve, personal income tax and corporate income tax are almost the same thing. With few exceptions the individual person does not pay their income tax, the corporation does, and for those exceptions the individual is the corporation. Income tax is really a sales tax on a corporation biggest expense, it's payroll.
Some sites these days won't show anything at all without Javascript, so I actually give the site kudos for working well with no Javascript.
Evidently Javascript causes cancer.
A tax on a home not deriving income does not fit any normal person's definition of a wealth tax.
https://projectionlab.com/financial-terms/wealth-tax
People determined not wealthy enough to get a mortgage do not pay property taxes on a house they are not wealthy enough to own.
Those wealthy enough to own a house pay property taxes; ergo wealth tax.
Over the years different explanations were written down as legal justifications "why it's different than this other very similar scenario" but people of the past were just making something up to not look hypocritical; someone with the means is taxed more for the privilege is how it goes. Poor people don't pay taxes.
Poor people (typically) don't pay income taxes.
This is why it's worth knowing the difference between progressive and regressive taxes.
It's like scaffolding out the Windows pipes screensaver in your head; endless bends and bends while no pipes actually exist. There is no spoon; it's just primates parroting the bird song they have been whistling since youth.
It's fundamentally a tax on wealthier people among a community.
We really going to sit here in 2026 and pretend the people who wrote down all these rhetorical circumlocutions weren't just making up language to justify their supposed expertise/their social moat? All of the legal system was wielded by generationally rich families to screw have nots. The entire American system of history.
Strip away the ornamental language of the law and just see the ground truth; a person with means to buy the house pays a tax on it all. A poor person never pays a tax because they never own a home.
What is this? Why does everyone feel like they stepped out of the middle ages where dark tongues still exist and the ornate incantations of superstitious people still rule?
It doesn't need to be logically as complicated and intentionally obscured (in my opinion legalese has been to manipulate the illiterate which were the majority back in the day).
Such social conservatism is holding society back.
Also, not all states apply property taxes the same. In my state, my house is assessed often by the government and then my taxes rise based on the value of my house.
At least it closes the loop hole where you borrow against your stock and never pay taxes on it because you never sold it.
If your stock holdings are growing faster than inflation and the interest rate at which you are borrowing, it’s an easy way to monetize unrealized gains without a taxable event.
Header large image, small pointless article, see also navigation. Sure nothing exceptional, but also, nothing offensive, looks like every other "news site" I have seen.