This prediction proved true. The Guardian
revealed in 2016 that Hillary Clinton avoided hundreds of millions of dollars in taxes by using the so-called "Delaware loophole". Delaware has become "one of the world’s biggest havens for tax avoidance and evasion" for the following reasons:
- Delaware is one of the easiest places in the world to set up an anonymous shell corporation. Setting one-up requires less information than signing-up for a library card. This means that it is difficult for law enforcement to trace the activities of the anonymous shell corporations to the people who actually own and control them. This makes Delaware not only an ideal place for tax evasion, but also for illicit activities like drug trafficking, terrorism finance and defrauding the government.
- A corporation can shift earnings from another state to Delaware, and since Delaware doesn't tax intangible assets from other states, the "corporations" can get away with not paying any taxes.
These two features are the reason why 1.1 million companies are registered in the small state of Delaware. The loophole is said to have cost other states more than $9 billon in lost taxes.
Delaware’s tax code has made it “a magnet for people looking to create anonymous shell companies, which individuals and corporations can use to evade an inestimable amount in federal and foreign taxes” — report by the Institute on Taxation and Economic Policy, titled Delaware: An Onshore Tax Haven
The Guardian discovered that Hillary Clinton and Donald Trump share the exact same address in Delaware - 1209 North Orange Street - for tax purposes along with Apple, American Airlines, Coca-Cola, Walmart and dozens of other Fortune 500 companies. In fact, 285,000 registered corporations are registered to operate at that address.
While it’s not surprising that Trump would be involved in tax evasion, it is shocking that Clinton is considering her statements regarding such tax evasion and loopholes. Clinton has repeatedly promised that as president she would crack down on “outrageous tax havens and loopholes that super-rich people across the world are exploiting in Panama and elsewhere”.
“You should pay what you owe, just like everybody else" — Hillary Clinton
"I’ll close corporate tax loopholes and make sure millionaires and billionaires can’t pay lower rates than middle-class families.” — Hillary Clinton