Monday, October 20, 2014
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If Romney wins, give Delaware an extra Congressman

"Because corporations are people, my friend"

If Romney wins, give Delaware an extra Congressman

Delaware is one of the smallest US States, with just 900,000 people, so few that it merits only one U.S. Representative in Congress. At the moment that's Democrat John Carney. As a freshman from the minority party, he doesn't get much of a voice.

I see a way to expand the "Home of Tax-Free Shopping"'s clout on Capitol Hill: The state is also home to nearly a million corporations, limited liability partnerships, and other "corporate entities," as the boosterish Delaware Department of State calls them - far more than its share on a national basis.

Don't those businesses deserve a vote, too?

Republican Presidential nominee Mitt Romney last year famously said and repeated that "corporations are people, my friend." Watch him on YouTube here.

See also the Supreme Court's famous 2010 Citizens United vs Federal Elections Commission decision, ratified by the Republican court majority in a party-line vote, which upheld the anthropomorphic idea that "the Government may not suppress political speech based on the speaker’s corporate identity." That reinforces that businesses are citizens, with free-speech and campaign-donation rights, just like human Americans.

A Republican victory in November should lead to the full enfranchisement of businesses, giving Delaware enough bodies (the root word of "corporations") to win a second House seat for the first time in living memory.

Enfranchising corporations may also serve to revive the two-party system in Delaware, Vice President Joe Biden's home state, where Democrats control nearly everything, because, as past State Sen. and GOP gubernatorial hopeful Charles Copeland reminded me in Greenville last month, the long-ago slave state's large African-American electorate is at least as registered, organized and heavily Democratic as the Irish-Catholic vote was in Kennedy's day; since the white electorate, though larger, is politically divided, black voters give the D's a big edge. By contrast, business, here as most places (outside New York and San Francisco), trends Republican. 

Why is Delaware so popular with business? It's one of a few states with very low incorporation fees and weak reporting requirements (though Nevada and Wyoming were even cozier, last I checked); also because Delaware has a hundred-year record of appointing business-friendly judges to its efficient Court of Chancery; and Delaware elected officials of both parties know it's in their interest to allow the state's corporate lawyers and incorporation firms to advise them on tweaking state laws to suit corporate needs - because they realize the high volume of low-fee corporate business pays a big chunk of the state budget, enabling Delaware to go without a sales tax, and enjoy low property taxes.

I first noted Delaware's swollen corporate population in 1996, in an investigative article for the Wilmington daily called "In the War Between the States, Delaware is Stealing the Spoils" (it won a pile of awards, and is still cited by tax reformers, though the full text isn't online.) I updated the count in 2002 in the Inquirer here, including a comparison with the Cayman Islands that prompted the Caymans' assistant secretary of state to call me and complain that "it is much, much easier to start a corporation in Delaware than in the Cayman Islands."

Now even the New York Times has caught on (see here, plus a reply by Delaware lawyer Francis Pileggi here). (Actually, the Times' business section and other national financial media writes about Delaware as a threat to American tax law and jurisprudence every few years, pleasing, no doubt, the jealous New York bar, which can only dream of influencing Albany the way Wilmington's corporate bar gets its way in Dover.)

It's about time the political implication of what the state has promoted as "the Delaware difference" - its status as "America's Corporate Capitol" - earns real Washington clout.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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