The Tiny Building Where 285,000 Businesses are Based

The Tiny Building Where 285,000 Businesses are Based


This video was made possible by Skillshare. Learn from more than 25,000 classes for free
for two months by signing up at skl.sh/hai26. There are a few things that everybody hates. Bug bites, going to the dentist, watching
videos that aren’t made by HAI and other Wendover Productions associated entities,
hand dryers, running out of things to put in a list, and of course, paying taxes. Of course there are a lot of different opinions
on taxes overall, but most seem to agree that they don’t like paying taxes themselves,
and nobody hates taxes more than corporations. That’s why often, corporations store their
money in tax havens—places with loose, generous tax laws that charge either very little, or
no taxes. Tax havens are like buy-one-get-one-free ice
creams, except instead of buying an ice cream, you put all your money in an overseas bank
account, and instead of getting a free ice cream, you don’t pay any taxes on your overseas
money. So actually, I guess it’s not like buy-one-get-one-free
ice cream at all and I should work on my metaphors. When you think of tax havens, you probably
think of places like the Cayman Islands, which doesn’t tax corporate or personal income,
or Bermuda, which also doesn’t tax corporate or personal income, but not many people think
of Delaware—a small, mid-Atlantic state with a population of 967,000 that’s home
to plenty of old historical artifacts like the New Castle Courthouse or former Vice President
Joe Biden. In fact, most people don’t really think
of Delaware much at all—it’s only home to 0.3% of the US population. Sorry Delaware-eites….um… Delawarriors…Delawalruses….people from
Delaware. Yet, Delaware is the legal home to over 65%
of all Fortune 500 companies, and 80% of publicly traded US companies. In fact, Delaware is home to more companies
than people. Now, this could either be because of the state’s
very respectable 1 to 138,000 IHOP to resident ratio or because of Delaware’s extremely
lax tax laws. First of all, in Delaware, companies don’t
have to pay corporate income tax on money that’s made outside of the state, and income
from interest and other investment isn’t taxed either, but mainly, Delaware is so advantageous
financially because of what’s called the, “Delaware Loophole,” which takes advantage
of the fact that Delaware doesn’t tax what are called “intangible assets.” Intangible assets are things that exist and
have value, but aren’t physical objects, like trademarks, copyrights, or my sense of
humor—there may not be much physical evidence of these things, but I promise you they have
value. So let’s say, as a hypothetical, I start
a corporation called, “Giraffe as Interesting.” We sell giraffes, this is our logo, and our
motto is, “our expert staff will get you a giraffe super fast.” Let’s say that we have giraffe stores all
across the country—in California, Pennsylvania, North Dakota, South Dakota, East Dakota, West
Dakota, Northwest Dakota, North-northwest Dakota, East-northwest Dakota, and of course,
Florida. Now, let’s say that my giraffe store in
Pennsylvania is raking in money—normally, all that money that store makes would be subject
to Pennsylvania taxes, but instead, I create a subsidiary of Giraffe as Interesting that’s
located in Delaware, and I transfer some “intangible assets” to that subsidiary. So I give the ownership of the name Giraffe
as Interesting, our logo, and our motto, to the Delaware subsidiary. Now, my store in Pennsylvania will pay my
Delaware subsidiary a trademark fee to use the name and logo and slogan. So let’s say that my Pennsylvania store
sold $100,000 worth of giraffes, but they also paid $95,000 to my Delaware subsidiary
for the rights to use the name Giraffe as Interesting and this awesome logo and that
great motto. My Pennsylvania store can deduct the money
they paid to my Delaware subsidiary from their income, so now they only have to pay Pennsylvania
taxes on $5,000, not $100,000, and that $95,000 they paid to my Delaware subsidiary doesn’t
get taxed at all, because, again, in Delaware, they don’t tax what’s considered, “intangible
property.” Every year, the government loses out on about
$9.5 billion because of the Delaware loophole. That’s enough money to buy 392,000 giraffes
or a few dozen US senators. So that’s the Delaware loophole and that
is what brings us to what you’ve all been waiting for—the two-story building that’s
home to 15% of all US companies. Now, there are a lot of important addresses
in the world: 1600 Pennsylvania Avenue, 10 Downing Street, 4 Privet Drive, 42 Wallaby
Way, but perhaps the most exciting of them all is 1209 Orange Street, Wilmington, Delaware. Believe it or not, this shabby building is
the legal address of over 285,000 companies. Why are they all in the same building? Because you have to have an address in the
state for, “service of process”—in other words, a place to get mail and legal documents
if you’re legally based there, but that law doesn’t say that you have to have staff
there. So a company, the CT Corporation, bought this
building at 1209 Orange Street and said, “hey companies, if you want, you can list this
as your address and get your mail here and we’ll deal with it so you don’t have to.” Therefore, 285,000 companies said, “yep,
cheerio, that sounds great,” which is how we ended up with Apple, Google, Walmart, American
Airlines, and Coca-Cola, all in the same two-story office space that looks like the headquarters
for an imaginary superhero called “boring-man,” whose superpower is coloring things beige. Now, let’s say you want to pay fewer taxes. You could a—declare your body a temple thereby
qualifying it for the religious institution tax exemption or b—learn how to properly
identify business expenses. For option b you could a—spend a captivating
afternoon reading through the IRS’ fantastic archive of documents or b—spend an actually
captivating 40 minutes taking this Skillshare course teaching you to do exactly that. It could end up being the most profitable
40 minutes of your life. If you really want to round out your afternoon,
I’d also recommend taking Thomas Frank’s productivity masterclass which can help make
everything you do more efficient. If you want to learn new skills and better
yourself, Skillshare is the place for you especially given their enormous library of
over 25,000 classes. If you sign up at skl.sh/hai26, you will get
two months of Skillshare for free and then, after that, their annual pricing works out
to less than $10 a month.

100 Comments

  1. Half as Interesting says:

    Want to evade some taxes? Well, guess what, if you’re given a free HAI t-shirt, which has (a very limited amount) of value, it qualifies as a gift and therefore you don’t have to pay taxes on it! Then you can just go sell it and then bam, free money. (My lawyer asked me to include a message saying that this is not legal advice, is not true, and that you should never take advice, legal or otherwise, from me.)

    How do you get a free HAI t-shirt? Glad you asked. Just submit a topic suggestion for HAI here and then, if we use it, you’ll get that free t-shirt shipped to wherever you are: https://docs.google.com/forms/d/e/1FAIpQLSfUdlvw6YgU44J8AnM2U_ZvRMyvh_CUM51LYSqF5nYJB9d1-w/viewform?usp=sf_link

  2. Zuaquim1 says:

    Please take a moment to realize the unlikely similarities between Delaware's and the Brazilian flag

  3. Thug Nasty says:

    Do a video on the Montana loophole that refers to opening an LLC to evade taxes on vehicles

  4. hobbes says:

    Can you make a channel called Twice As Boring

  5. Phillip Dingus says:

    Watching this from Delaware 🙂 The tax law is not the ONLY thing that brings companies. Our court system is also well known for being VERY well versed in extremely complex corporate law / contract disputes, which it kind of has to be considering how many companies are legally based here. This is similar to how a very disproportionate amount of patent lawsuits are handled by a single court in Texas. And, for those that don't know, we also have a trick to attract out of state shoppers – we don't have any sales tax. Only 5 states are free of sales tax and none of the others border us, so it attracts a lot of people looking to make large, tax-free purchases. It's kind of nice to be able to buy something and have it actually cost the price on the shelf.

  6. NoName says:

    Junior tax accountant in Australia here. I have no idea how intangible assets per se are taxed unless they were realised with a capital gain.

    Ohh it looks like it's the licensing fees that don't get taxed.

  7. Fei_Ling Bob says:

    Lol. I’m dying. From the disease that the government cure, because they are missing out on like 100000000 dollars of taxes

  8. 666 BRLN 999 says:

    So basically a US State is helping US companies to not pay taxes in the US, the USA never dissapoint in showing the many ways it can fuck over the bottom 90% of it's people.
    Americans: Keep electing Drumpf or Biden who will not change anything (that's what he said right) lmao.

  9. 666 BRLN 999 says:

    American Airlines dodging taxes and fucking over Americans, the irony.. oh boy.

  10. Skittle M&M says:

    RIP to the Bahamas boys

  11. Eat monster says:

    (Yes sure we got giraffes, but giraffe as interesting can get you a dozen US senators on your behalf! No tax! Get yours today!)

  12. Sham's Derpie Vlogs says:

    YES WE GOT NOTICED WE DID IT BOIS YESSSS 0:59

  13. William Frederick says:

    "Will you show a pic of Joe Biden?"

    "No I don't think I will"

  14. FanBird says:

    Another mistake HAI.

  15. Martino Barrett says:

    This guy is funny ? ??

  16. Ezra Kainz says:

    But wait, isn't Tax Evasion illegal?

  17. Mediocre says:

    Man I fucking hate capitalism

  18. Mr. Lava Lamp says:

    So this guy and wendover ARE the same dude correct? I know it should be obvious but just in case lol

  19. Matthew I says:

    4:58 Left handed person

  20. Sportamrina says:

    Now a video on how Amazon paid no tax pls

  21. Choo choo says:

    scumbags.

  22. Fluffy Havoc says:

    The correct term is Delewho

  23. Niko L says:

    isn't software technically intangible?

  24. Yutah Andrei Ogawa says:

    Is it sad that, just a moment after reading the title, I was able to guess "tax evasion"?

  25. Tim Fischer says:

    Breaking News: The rich don't pay their fair share.

  26. R Freitas says:

    I choose A, declare my body a temple LOL

  27. Ram Bikkani says:

    Joe Biden thing was hilarious

  28. Lukas says:

    1:22 why do these coordinates point to a random house in the middle of nowhere? Is that where Sams sense of humor is held hostage for the past year?

  29. Crhadden1 says:

    Do TWL on this channel

  30. Skullmiser says:

    How do I buy a Giraffe?

  31. Jayitnl nl says:

    you really make nice videos but really need to stop the ads in the beginning…

  32. Adamthepoo :P says:

    hears all the dakotas
    me, studying geography after moving to America: sweats nervously

  33. King Peppy says:

    Coloring things beige is teh OP superpowa my duder. Everything beige now so you can't find ur get away car you dastardly bank robba, Boring Man save teh day once again!

  34. JA CK says:

    I saw Biden there, best artifact!

  35. Jouva Moufette says:

    I like how "West Dakota" was on the east and "East Dakota" was on the west

  36. Abiram Nadarajah says:

    **Similes, not similies

  37. Apoorv Chauhan says:

    I honestly think bill wurtz and HAI would make an excellent collaboration. It might seem peculiar but I’d love to see it.

  38. El Tlaxca says:

    Ya los exhibiste!

  39. Austin says:

    Delaware isn’t just great for corporations! Gas is cheaper cigarettes are cheaper and living is cheap as well! Great state with great small beach towns. Slaughter beach is great

  40. Ash ` says:

    Was that Bugthief in the background? If so, salute to you sir!

  41. Benjamin A says:

    "generous" tax laws and the government "losing out" on tax income are very funny ways of saying that individuals and corporations get to keep more of their own money.

  42. James StJohn says:

    The state not stealing from you is not you stealing from the state.

  43. Surita Mantinubra says:

    *Similes, not similies

  44. CodyORB says:

    LPT: When buying something non-physical online, set your address to somewhere in Delaware so you don't pay sales tax!

  45. seneca983 says:

    Doesn't the Delaware entity still need to pay federal corporate income tax?

  46. Tim Mccoy says:

    Delawalruses ???

  47. Zhu Bajie says:

    Another reason not to trust Biden.

  48. Cloud Klaus says:

    Hold on. You skipped over that "Declare your body a temple for tax evasion". Please, tell me more.

  49. Benjamin Carter says:

    Sorry ok this isn't relevant but I'm on a rabbit hole. What is the most heard song in history?

  50. Sumod Kulkarni says:

    This would've been interesting if giraffes actually existed.

  51. Austin Drukker says:

    This video is fascinating

  52. Pensive says:

    Well you have already made your first mistake! Where on earth do you buy a giraffe for $24234?!?!

  53. Amanda Schwartz says:

    That would make Delaware’s GDP(GSP) close to 1 trillion dollars

  54. Cool Corner says:

    Nice I'm going to your giraffe store

  55. AquaDragonDavanin says:

    hmm, maybe there should be a law to fix this loophole

  56. Pro Gamers says:

    where is the new video

  57. DumbSkippy says:

    Well F*ck !

  58. Anmol Srivastava says:

    congrats on 1 million subs

  59. TheSajtrga says:

    Thank you for your channel and videos, I learn a lot of things I normally wouldn't thanks to you. However, I have to admit that the increasing number of "jokes" in your videos is getting irritating

  60. Green-Pill Neo says:

    The videos on this channel would be a lot better if you would simply upload them to Wendover Productuons and stopped trying so hard to come off as funny to differentiate this channel from the other

  61. Tomstarooni says:

    3:57 you forgot 64 zoo lane

  62. MintArcade says:

    You miss south by southwest Dakota

  63. James Cataldo says:

    I really hate that it took me a second to get the giraffe as interesting joke.

  64. David Alexandrovitch says:

    Delaware represent!

  65. Poppy Christopher says:

    @wendoverproductions

  66. Kieran DeGrada says:

    hmmmmmmmmmmmm very interesting

  67. Bertie Symonds says:

    What’s so boring about beige?

  68. Albert Kite says:

    comment i m a pedo

  69. Albert Kite says:

    i like schoolshooting

  70. Albert Kite says:

    want to have fun (wink wink)

  71. purple feet says:

    Some pretty edgy jokes in this one

  72. Speeds YTPs says:

    I, for one, like going to the dentist. It provides me with a free 45-minute window to take a nap.

  73. Daniel Cowan says:

    Tax havens
    -so basically dublin

  74. Andro King™ says:

    If you make a non sponsored video, it will be the end of the world

  75. Rick Kemp says:

    This should result in a modern strike. Quit submitting to what the government tells you is an average job. The real average income per person is about 90,000 a year before any earning from assets or investments. It's only based on "earned wages" which means the real average income in America is about 1 million per person. If you have assets, which mean stock market holdings, real estate holding, anything that your employer doesn't report as working income are NOT considered as income. Quit being fooled by government provided fake numbers and you will realize 90 percent of Americans are the new modern slaves. The unemployment rate is not what you are being led to believe. Our economy is a few years if not months from a complete collapse. The more YOU know the better off we will be

  76. Name Name says:

    That is actually incredibly sinister and shouldn't be legal. This is legal tax evasion that deprives the American people of money just so these already extremely rich companies can get even more rich. In fact, corporations pay a disproportionately low amount of taxes compared to the average person, when it should be the opposite way around.

  77. Norris Jinglewilly says:

    Tax is voluntary when you are rich

  78. Johnny R says:

    analogies?

  79. gotonull says:

    The end of this is stupid because you basically just say go to my advertiser

  80. Buster Beagle says:

    No need to self declare..your body was deemed a temple by Christ the Lord.

  81. Francisco Siordia says:

    I thought the beginning was heading to a turbo tax ad…

  82. Da Potato says:

    I am wondering, if this building is even big enough to sort out the mail of these 285K companies?

  83. JorRob001 says:

    362 Delawarians got pissed

  84. Memes n Shet says:

    Kowloon city – Buisness Edition

  85. Peter Cheng says:

    Who needs panama papers…..

  86. Rob R says:

    I enjoyed the little bit of content that came with this ad for Skillshare, but the DELAWARE STATE government loses that $9.5B to be clear, not the US government. These are state corporate income taxes, not federal. The federal government doesn’t care in what state you’re incorporated and they happily tax your intangible assets. Also, the CT Corp address isn’t just about mail, CT staffs the office because process services must be able to be served in person (you’re an idiot if you serve them by mail). CT has offices in every state.

  87. H&Ks until the end of days! says:

    Taxation is theft. Fuck the crown; hang the king and his tax collectors!

  88. jackson schmitt says:

    It's analogy not simile or metaphor

  89. Andrew Dzierson says:

    Joe Biden and the Ukrainian loop hole.

  90. Tyler Essex says:

    Its in Delaware

  91. I Created An Account For This says:

    Delaware!

  92. sportsguy1989 says:

    "Hi. I'm in Delaware."

  93. Maderra -4 says:

    Anybody knows the music at 3:45 ??

  94. Gabriel A. Martinez says:

    our expert staff will get you a giraffe super fast. lol

  95. kasa says:

    Taxhavens are basically just loopholes size of the city. Only reason taxhavens work because there is so few of them, otherwise those places would do really bad from lack of funds. If business avoids taxes, it just means people working will be paying more. It's just hugely unethical and just another way to make rich richer.

  96. Pedro Juan says:

    0:19 There is always an Atreus among us

  97. Isaiah Lali says:

    I'm moving to Delaware

  98. TTill says:

    1:50 nah, I think it's the iHop ratio..

  99. Tyler severson says:

    Dele.. where? That’s a common joke here

  100. Kay325 says:

    Thank you for recognizing all the Dakotas

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