Tuesday, 26 April 2016

big brother and the holding company

The always interesting TYWKIWDBI directs our attention and sadly abject resignation to this non-descript office building in Wilmington, Delaware that dwarfs other company registers—like Ugland House, as the source article from the Guardian reports, of Georgetown in the Cayman Islands.
Though only hosting a fraction of letterbox businesses, Ugland House was incredulously called “either the world’s largest building or the biggest tax-scam on record”—but as the official address of some three-hundred thousand companies, ranging from the portfolios of politicians (making for some strange mingling of assets) to the world’s richest and most powerful corporate entities, this little yellow building is a clear and unequivocal answer as to why no Americans were tripped up in the Panama Papers.  After all, why risk engaging an offshore tax-haven when there’s something far closer to home? More than a million firms (including the media outlet cited), foreign and domestic, have been lured by the state of Delaware’s business-friendly posture, opacity and low-tax burden, whose structure openly encourages companies to shift earnings from other jurisdictions, costing other states and countries untold billions in tax-revenues.  Obviously such loopholes like this inspire rage and indignation, but given its prevalence and the duplicity of custodians, is it any wonder that this sort of thing is happening and no one is willing to do a thing to stop it?