Or, Is Delaware’s Depravity Literally Unthinkable?
Corporate Voters Project – Research Note #6
The more I dig into Delaware’s law and politics, the more apparent it becomes that lawyers and judges from outside of the state cannot bring themselves to imagine – much less acknowledge – the depth of state’s commitment to servicing corporations. The devotion of Delaware’s political class (past and present) to wealthy corporations, over and above any kind of public good so far defies the expectations of strangers – even well-informed ones – that it blinds them to the state’s fundamental features. [1]
A pair examples from the last week’s reading can illustrate the point.
First, an excerpt from Maurice Wormser’s book Disregard of the Corporate Fiction, originally published in 1927. Wormser was a renowned appellate attorney, and a well-known law professor; he’s still the namesake of Fordham’s Moot Court Competition. Among other things, he popularized the phrase “piercing the corporate veil,” which you’ve heard a lot if you follow Chancery Court nonsense.
Discussing various definitions of the corporation, he observed:
“Just what the corporation is, no two legal authorities are in accord. Definitions are dangerous. While I have no desire to enter into the philosophy of the subject, it should be observed that there are a number of very distinct theories, each hopelessly repugnant to the others. The German, or association theory, which has such an eminent English follower as Sir Frederick Pollock, views a corporation almost as a natural person and regards it as acquiring an “organic character which qualifies it to participate prominently in the life of the state and in the law.” I doubt, however, whether even the most advanced German philosopher would seriously argue that a corporation could marry or be given in marriage, or that it could vote at an election.” [emphasis mine] [2]
Worsmer, deeply experienced corporate law – and thus a man familiar with Delaware – should have known better. A few years later, in 1931, Milford, DE did what Wormser thought no German philosopher would argue for, and amended its municipal charter to grant corporations suffrage rights, to wit: “every owner of property whether individual, partnership, or corporation shall have one vote for every dollar or part of dollar of tax paid” in special bond elections. So not only could corporations “vote at an election,” they could do so at a bargain exchange rate of one dollar per vote. [3]
(NB: Milford was probably not the first Delaware municipality to do this – there was probably at least one town with corporate voting rights extant when Wormser published – but it’s the first I have specific evidence for).
Second: a half-century later, but similarly unfamiliar with Delaware’s expanding grants of corporate suffrage rights, in 1973, Justice William Douglas wrote in horrified dissent from the majority in Sayler Land Company v. Tulare Lake Basin Water Storage District. The case was one of a series that sought to re-establish property as the preeminent force in American politics, after anti-democratic forces had lost ground with end of Jim Crow and the development of the “one man, one vote” doctrine. In this particular case, the majority approved voting rights for large agricultural corporations in special Texas water district elections, on the basis of these corporations having a “personal” stake in the districts, as ratepayers.
Douglas, a proud New Dealer outvoted by an increasingly reactionary majority, was appalled at this extension of corporate personhood into the voting booth:
“It is indeed grotesque to think of corporations voting within the framework of political representation of people. Corporations were held to be “persons” for purposes both of the Due Process Clause of the Fourteenth Amendment, and of the Equal Protection Clause. Yet, it is unthinkable in terms of the American tradition that corporations should be admitted to the franchise. Could a State allot voting rights to its corporations, weighting each vote according to the wealth of the corporation? Or could it follow the rule of one corporation, one vote?
It would be a radical and revolutionary step to take, as it would change our whole concept of the franchise. … Four corporations can exercise these governmental powers as they choose, leaving every individual inhabitant with a weak, ineffective voice. The result is a corporate political kingdom undreamed of by those who wrote our Constitution.” [emphasis mine] [4]
Alas for Douglas – and for us – there are more things in Delaware than dreamt of in his philosophy.
[1] This lack of imaginative capacity is perhaps analogous – if less justifiable – to “normie” or “apolitical” Americans’ approach to the authoritarianism of the Trump/Musk regime; it is so out of scope that such a thing would happen, that it simply can’t be happening.
Or, A Bibliography of News, Opinion, and Sources Relating to the 2025 Attempt to Revise Delaware’s General Corporation Law. Final update: 3/26/25.
Emma Willard, “The Temple of Time” (1846), via Cartography Associates (CC BY-NC-SA 3.0)
Note: SB 21 (repackaged as SS 1 for SB 21) passed the Delaware House late on Tuesday, March 25, 2025 and was signed into law the same night by Governor Meyer. The bibliography below is updated to include reports through the following day – March 26, 2025 – but nothing beyond that point.
Since it was dropped on an unsuspecting public two weeks ago, Senate Bill 21 has occasioned a great deal of both propaganda and conversation – and even some reporting and evidence-based analysis. This short bibliography (or, less pretentiously, link-roundup) is intended to help Delawareans and other folks get up to speed on the issue, understand the forces in play, and get a sense of the stakes.
I will update it, as my time allows, and events merit. I have tried to (mostly) link publicly accessible sources, but there may be some paywalled exceptions.
Some caveats: the bibliography below is not comprehensive, nor is it intended to be. It’s what, in my judgment, is the most useful for understanding what the hell is going on.
Also! It is not a guide to the bloggy conversations among corporate law specialists, a play-by-play for Dover courtiers’ inside baseball, or the group chat among oligarchics’ agents – though it intersects with all of those discourses. (Go to LinkedIn, Facebook, and Signal, respectively, if you want those.)
Senate Substitute 1 for Senate Bill 21: “AN ACT TO AMEND TITLE 8 OF THE DELAWARE CODE RELATING TO THE GENERAL CORPORATION LAW,” filed March 12, 2025, passed March 25, 2025, https://legis.delaware.gov/BillDetail/141930
Summary: “This Amendment mirrors the proposed changes in SS 1 for Senate Bill 21, but provides that the corporation must “opt-in” to adopt them. It adds a new section one, which describes the method by which the corporation may opt in to the changes from the default, existing law.”
Senate Bill 21: “AN ACT TO AMEND TITLE 8 OF THE DELAWARE CODE RELATING TO THE GENERAL CORPORATION LAW,” filed February 17, 2025, https://legis.delaware.gov/BillDetail/141857 [original bill]
Internal emails between personnel in Gov. Matt Meyer’s office and various Musk & Zuckerberg associated lawyers, coordinating drafts, details, & messaging around the push for SB 21;
The items below represent a wide spectrum of debate on SB21 and the political economy of Delaware’s corporate law; inclusion is not an endorsement that a given piece is reliable, truthful, or accurate – simply influential. This list is organized chronologically, working backwards from most recent.
Andrew Verstein, “The Corporate Census,” SSRN Scholarly Paper (Rochester, NY: Social Science Research Network, February 25, 2025), https://papers.ssrn.com/abstract=5154952.
NB this item is a working paper – meaning, it is an unpublished draft, that has not undergone peer review. All arguments should be understood as preliminary, and incomplete.
Public Citizen, Americans for Financial Reform, American Association for Justice, Consumer Federation of America, STOP DELAWARE SENATE BILL 21, https://www.stopsb21.com
The rationale for this rash action is fear: fear that if Delaware does not extinguish judicial independence to better fit Musk’s perverse desires, Delaware will lose critical revenues, as Musk leads corporations to “DExit,” or registering in other states, because of Chancery Court decisions that since 2022 have supposedly upset the balance of power between shareholders and corporate managers.
The data does not support the panicked narrative that SB 21’s supporters have been promoting, however. That narrative seems to be a product of Musk, and his paid agents, spreading misinformation like a miasma across the state.
Delaware’s Corporate Franchise is a Volume Business
Delaware benefits in several ways from having outside corporations registered here. The most valuable benefit is revenues from the “corporate franchise tax.” This is a fee that corporations headquartered outside the state provide Delaware for the “privilege of being incorporated in Delaware.” (Fiscal Notebook, 2024 ed, p. 108). In recent years, the corporate franchise tax, alone, has provided ~20% of total state revenues, or about 1.2 billion dollars. (Personal income tax, paid by human people, provides 33% of the total state revenue). (Fiscal Notebook, 2024 Ed, p. 32).
The critical thing to know about the corporate franchise tax is that it is not an income tax: it’s a set of tiered fees, assessed based on a corporation’s total number of authorized shares – but with a max payment cap of $250,000.
In other words, Delaware is in a volume business, not a value business. Delaware has – or rather, should have – an interest in appealing to the largest number of corporate registrants, not the wealthiest billionaires. That’s a critical point, because the interests of most corporations – and most investors – do not align much at all with the desires of oligarchs like Elon Musk. If it wants revenue, Delaware shouldn’t be catering to the tiny cohort of vampires.
Back to Delaware politicians’ panic: you would think if the corporate franchise tax revenue is indeed in peril – if the “DExit” movement is real, and not just a propaganda hallucination – then there would be some data to support that claim.
Alas for Musk et al., and their well-paid agents, three data points suggest the opposite is true.
1) Startups Continue to Choose Delaware
Peter Walker, “head of insight” at Silicon Valley data infrastructure firm Carta, recently shared a chart from his company’s private dataset demonstrating that 90% of startup C-Corps are domiciled in Delaware – a percentage that has “barely shifted in the last 5 years.” Including in 2024.
2) The Number of Corporations Filing Franchise Taxes Keeps Going Up
The most recent public figures show that 309,911 firms filed franchise tax payments in FY 2024 – an increase that continues the unbroken upward trend of the last decade, before the recent Chancery Court decisions, and then through and beyond them.
Now, total corporate franchise tax receipts have dipped, somewhat, from 2023 to 2024. But they have done so following the same patterns as the Corporate Income Tax.
Source: “Tax Receipts: Corporate Franchise Tax,” and “Tax Receipts: Corporate Income Tax,” in Fiscal Notebook FY 2024 ed., pp. 109, 115
That suggests to me that the cause lies in macroeconomic conditions – unemployment, inflation – rather than anything to do with Delaware’s legal regime. (Corporations paying income tax here do business here; they can’t exit as easily as paper registrants, and have less incentive to do so).
Since 1977, Delaware’s state government has relied on the Delaware Economic & Financial Advisory Council, or DEFAC, for economic forecasts. DEFAC meets quarterly to assess data, and issue guidance – guidance that the General Assembly usually regards as binding on legislation.
At the December meeting, DEFAC forecasts steady franchise revenues for FY 2025, 2026, and 2027. That is consistent with economic indicators – at least, prior to Musk’s installation as co-president – and suggests this expert body saw no threat in the data of the sort SB 21’s draftees were already hallucinating.
Musk’s Pungent Miasma is Not Reality
In short, private and public data sources agree: there is no observable decline in incorporations in Delaware, and no evidence that “DExit” is occurring in response to Chancery Court rulings. Further, the advisors specifically tasked with forecasting future franchise tax revenues – that is, a body of people mostly not employed by Elon Musk – do not see evidence for dramatic change.
An alternate explanation does fit the data better, though. Elon Musk’s lawyers drafted SB 21 to benefit their oligarchic clients, not Delaware. Musk’s paid agents are breathing the bad vibe fumes they want to see in the world into existence. The odor of panic they’ve wafted into lawmaker’s nostrils is thus a miasma, in the classic sense: unhealhy and unpleasant air, produced as the unpleasant exhalation of rot and corruption, that causes feverish illness.
Delaware’s leaders should not radically revise our laws, and gut a valuable franchise, on the basis of huffing Musk’s swamp gas.
Note: while by statute, the heads of Delaware’s state agencies are supposed to provide public reports on things like the total number of corporations registered here, and revenues derived from them, in practice Delaware state government is … uninterested in transparency. Opacity is part of the value Delaware provides, apparently.
The upshot is that basic data, and foundational statistics, are often hard to get, and difficult to parse using normal methods even when located. Still, while our state government officials are intentionally(?) incompetent at communicating to the public, they have not shirked their duties completely; there are sources worth your time & examination.
While this report is not linked on the DE Finance Department’s page, you can find it at that URL. An annual report, it offers a wealth of up-to-date statistics on the fiscal situation of the government of Delaware, including revenues and expenditures, as well as detailed supplemental information on specific taxes, fees, pension contributions, bond obligations, and subsidiary agencies.
The fiscal notebook is a rehashing of much of what is in the ACFR, but summarized and more richly contextualized look at the state budget, with historical data and legislative histories. If you want to know when the corporate income tax changed, and under what legislation, the Fiscal Notebook is your guide. It has some charmingly 1990s graphic design, as well. Prior reports are available here.
DEFAC posts cryptic briefing books and terse meeting minutes, grouped by date, on this page. If you dig far enough, you can find their predictions; and if you want a bit of fun, take a look at how far off they were in their predictions (usually they underestimate revenues by quite a bit, and overestimate the cost of expenditures; there appears to be a spirally structural austerity built into their models, assuming any models actually exist beyond intuition).
In theory, under the law, this page should contain the division’s up-to-date annual reports, detailing numbers of business entities registered in Delaware, and other pertinent information. In practice, this website is a wasteland.
Is Delaware More Than A Corporate Cut-Out? Its Elected Officials Don’t Seem to Think So
The following is a departure from my usual historical research and archival content – but related to it, insofar as I am attempting to puzzle through why Delaware’s political economy has produced elected officials so eager to aid, rather than oppose, mortal threats to American democracy.
subtle, right?
The federal constitution that Delaware was first to ratify in 1787 is no longer in effect. That doesn’t seem to worry Delaware’s leaders, though. In word and deed, they seem much more concerned with Elon Musk’s feelings.
In short, alleged ketamine enthusiast Elon Musk and his junior partner president, Donald Trump, have declared that there is only one branch of government: them. L’État, c’est DOGE.
Amid this obvious and flagrant coup, Delaware’s elected federal officials are difficult to find. Even compared to the median opposition party member’stepid efforts, Senators Coons and Blunt Rochester and Representative McBride are striking in their absence from public view. If you are able to reach their offices by phone – good luck, the lines are busy, leave a message – staffers repeat vague statements of concern, and bland praise for bipartisan civility. They have taken no meaningful action, however.
Doing nothing is bad enough, but the Delaware state government is actively campaigning for worse – collaborating to open a second front of the new business plot against America. Explaining why requires taking a bit of a long view…
Since the early 20th-century, Delaware has been the official residence of choice for business entities seeking easy registration, light fees, and a pliable, circumspect, and pointedly incurious government. Further, since the 1980s, Delaware law – through black-letter legislation and court precedents – has bent itself to the task of enforcing an extreme Friedmanite orthodoxy on American corporations (“The Social Responsibility of Business is to Increase its Profits.”) In combination, this means that Delaware is the proximate reason why the relentless maximization of stockholder wealth has become the sine qua non of modern American corporate capitalism. Corporate directors and executives can be sued – and lose – if they can’t prove their decisions put stockholders’ wealth first, last, and only.
Curiously, the gospel of shareholder primacy has not been greeted as good news by the current class of robber barons. A cohort of oligarchs who double-dip as head managers and major investors have chafed when they’ve received pushback in Delaware courts for filling their pockets with private side deals instead of filling their pockets and stockholders’ pockets, simultaneously. And that pushback – gentle, partial, and oddly principled though it might be – has left them seething.
More specifically: in response to recent lawsuit losses, emerald mine heir Elon Musk and other like-minded techbros have mounted a furious propaganda attack against the legitimacy of Delaware law. (The particular target of their ire are the jurists of the Chancery Court, the primary venue for most corporate cases – and importantly, led by a woman). Last year Delaware’s General Assembly replied to these public tantrums with a hasty revision of the Delaware General Corporation Law. As is customary in Delaware, this critical amendment bill was drafted in secret, by a select committee of a local lawyers group, the Corporation Law Section of the Delaware State Bar Association. Less usually (though not unprecedentedly), the amendments overturned Chancery Court decisions, cutting against decades of precedent to restrict stockholders’ rights. The new law destroyed the pretense of judicial independence and expertise – which was the point, of course – and was intended as a peace offering to the addled billionaires, a balm to soothe their frenzied anger and calm any advanced irritation afflicting other corporate directors.
Alas, bullies are greedy and rarely satisfied, and so attacks on Delaware have only increased since. Musk et al. have been recruiting other tech CEOs to “DExit,” i.e. remove their formal business registrations from Delaware to other, redder states. Still just a trickle, this movement could be a big deal for the state’s budget, if it turns into a flood: 30-40% of annual state revenues come from the various fees and taxes collected from the businesses registered to, but not operating in, Delaware. This windfall, and its attendant benefits, is collectively known as “the franchise.”
In Meyer’s new dispensation, Delaware can’t just be bought: it’s a fire sale, with deep discounts for the loudest and worst people in the world.
The leaders of the General Assembly have been less visible in their appeasement, but seemingly just as eager to fall in line. Since the new session has opened, they’ve done nothing to respond to any of the Trump/Musk regime’s attacks on Delaware’s residents or its institutions, and pulled bills that might have offered some protection.
Their capitulation last year to corporate demands has opened the door to other bullies, too. Spotlight Delaware reports that regional “nonprofit” healthcare monopolist ChristianaCare has filed suit in the Court of Chancery opposing the weak and watered-down cost control law passed last year. ChristianaCare argues that cost reviews would erode “the integrity and viability of the (Delaware) corporate franchise.” Making healthcare more affordable would kill the golden goose, you see – so it can’t be done.
Seen in the fuller light of Delaware’s political economy, the gormless abdication of responsibility by Delaware’s members of Congress is less surprising. How could they be expected to move bravely to counter a revanchist coup, when they’ve built whole careers in a state dedicated to fulfilling every billionaires’ unhinged whim?
For over a century, Delaware has benefited from the fact that nowhere else in the country has a ruling elite more willing to give outside oligarchs what they want, when they want it, and fast. From a certain angle, our corporate law, and the “the franchise” it spawned, has indeed been a goose that lays golden eggs. It has made some lawyers, some lobbyists, and some business service executives quite rich; and it’s allowed generations of voters, legislators, and governors to avoid hard choices. You can see why no one wants to upset the goose.
But geese are jerks. And now Delaware’s specific, special goose – the unelected billionaire goose – is burning down our house, while our family sleeps inside.
Might it be time to cook that goose, instead? The alternative is to be cooked, ourselves. Golden eggs aren’t worth much when your democracy is dead, even in Delaware.
On May 14, 1990, the Town Council of Dagsboro Delaware considered the topic of business licensure in a way James Scott would find familiar:
I am not how the conversation with the Chamber of Commerce went, with regard to this new effort to make business legible to the town government. I’m curious how Mayor Otis Jefferson pitched it to a group of businessmen generally unwilling to let the state in, even as they constantly sought to use the state for their own ends (including profit).
But something must have gone forward from 1990, because Dagsboro now not only allows businesses to vote – it requires them to be licensed.
Source: “Minutes, May 14, 1990” in Minutes of the Dagsboro Town Council, 1941-1993, Delaware Public Archives, RG 7040-000-001, roll 2
![Louis Dalrymple, “Uncle Sam’s Dismal Swamp,” Puck, November 15, 1893, https://www.loc.gov/pictures/resource/ppmsca.29155. Print shows Uncle Sam sitting on a log in a swamp labeled "Spoils System" from which snakes labeled "Quayism", "Bardsleyism", and "Tannerism", and noxious fumes rise in the form of shades labeled "Raumism - Pension Swindler, Crokerism, McLaughlinism, Tweedism, Prendergast - Political Assassin, [and] Guiteau - Political Assassin". Also shown among the tree roots is Charles A. Dana.](https://daelnorwood.com/wp-content/uploads/2025/02/dismalswampcrop.png?w=839)
Dael A. Norwood 
