My Own Private Delaware
Khadija Sharife · Hollywood Untaxed
Hollywood loves a movie about a maverick individual taking on the might of a giant corporation – think of films like Erin Brockovich, Public Enemy or The Insider – but one breed of behemoth is unsurprisingly immune from scrutiny. Hollywood's ‘big six’ studios – Paramount (a subsidiary of Viacom), Twentieth Century Fox (News Corporation), Columbia (Sony), Warner Brothers (Time Warner), Universal (General Electric) and Disney – may have their principal place of business in California, but they’re all incorporated in Delaware.
Delaware, the first state to ratify the US Constitution, is also the world's leading tax haven, thanks to its generous provision of such perks as corporate opacity, banking secrecy, company redomiciliation and protected cell companies. Last year, 200,000 companies, including Fox, Universal and Warner Bros, as well as Coca-Cola, Ford, Kentucky Fried Chicken and two-thirds of the Fortune 500, were registered at the same single-storey address: 1209 North Orange Street, Wilmington.
Just as being based in Delaware helps Chevron, for example, minimise the taxes it pays in Algeria, Angola, Brazil, Argentina and Alaska, so it helps Fox avoid sharing the profit from films like Avatar with the state of California. This shouldn’t go down well with California's state employees who are being forced to take three days unpaid holiday every month. Yet even as Governor Arnold Schwarzenegger's 'state of emergency' shifts the multi-billion-dollar budget deficit burden to citizens, Hollywood’s reaping the benefits of tax-code changes last year that hand hundreds of millions in tax credits to movie studios. Don’t expect to see ‘Last Exit to Wilmington’ coming to a screen near you any time soon.
Comments
It's also where LRB USA is incorporated. For the very same reasons. Keep up the good work.