Why Grubby Politicians like Joe Biden No Longer Get All the Breaks

[Editor’s Note: Work duties have taken us to southern Indiana this week.  We’ve used the distraction as an opportunity to ignore the latest happenings in the world of money and markets.  Thus, today we recall one of the early legends of the self-publishing business…and the generous gift he offered to the little guy entrepreneur.  Enjoy!]

A Man of Confections

Ted Nicholas Peterson – known to friends as “Nick” – was a man of confections.  Fudge, to be exact.

At age 21, and $96,000 in debt, he started his own confectionery business called, “Peterson’s House of Fudge,” in Wilmington, Delaware.  Through the 1960s, by way of savvy marketing and an intense study of the awesome power of words, Nick grew his business from one store to ultimately 30 store franchises.

But, for Nick, the love of fudge was merely a starting point.  For what Nick really loved was words, marketing, and entrepreneurship – and how he could empower the little guy to succeed.

One way Nick found to empower the little guy was rather creative.  He discovered how to give them the tools of an expensive lawyer…without the expensive lawyer fees.  No doubt, this endeavor didn’t win him over many legal professionals.

But Nick didn’t much care for lawyers.  Thus this simple, yet invaluable idea, led him, in 1973, to author his first book under the pen name Ted Nicholas.  It was called, “How To Form Your Own Corporation Without a Lawyer for Under $50.”

The book was pure gold; a game changer.  Because before this book, you’d have to pay a lawyer hundreds of dollars to set up a corporation.

Without question, Nick delivered on his big promise; the book included all the necessary tear-out forms and had simple instructions that anyone could follow to incorporate their business.

Moreover, he self-published the book and through skillful direct response marketing it became one of the best-selling business books of all time.  Yet this isn’t all Nick did to help the little guy.  In fact, one of his other many companies did much, much more.

The company, which may still exist, was called “The Company Corporation”.  We’ll have more about it in just a moment.  But first, a slight deviation is needed to better appreciate Nick’s remarkable gift.

Library Cards

President Joe Biden is a politicians politician.  Once he locked his grubby hands on power and control he never let go.  He represented Delaware in the Senate for 36 years.  Then, like sulfur gas, he ascended to Vice President, and now President.

But what you may not know is that his interim years, between 2017 and 2021, were his most prosperous.  In 2017 and 2018, alone, President Biden hauled in $15 million in a lucrative book deal and speaking fees.  Good for him.  If Janet Yellen can rake $7.2 million in speaking fees, “Middle-Class Joe” should too.

Of course, left to his own devices, President Biden quickly becomes lost.  “Where the hell are we?”, he recently asked his wife Jill.

But while President Biden’s often lost, his home state of Delaware knows exactly where it is and what its purpose is.  That is to provide a legal and administrative sanctuary that allows businesses to operate with great latitude.

Delaware’s origins as America’s corporate epicenter dates back to 1899.  That’s when state legislators passed the General Corporation Law, which allowed anyone in the United States who wanted to form a company in Delaware to do so.

Today, there are nearly twice as many Delaware-incorporated companies as there are Delaware voters.  Corporations can place their profits in Delaware-based holding companies to avoid paying taxes in the states where they actually operate.  Delaware LLCs can also be incorporated anonymously via third-party agents.

According to the Institute on Taxation and Economic Policy, “Setting up a company in Delaware requires less information than signing up for a library card.”

In fact, it’s so easy that several years ago Joe and Jill Biden set up two Delaware Corporations.  The Intercept, and other referenced sources, offers the particulars:

“The Bidens have used their home state’s financial privacy laws to shield his income from public view, by setting up two tax- and transparency-avoidance vehicles known as S corporations.  He and his wife Jill Biden called them CelticCapri Corp. and Giacoppa Corp., respectively, and, according to the Wall Street Journal, have reported more than $13 million in profits the previous two years that weren’t subject to specific disclosure or self-employment taxes.

“As CNBC has described, money Biden made from book deals and speeches flowed into the S corporations and was then remitted to Biden and his wife as ‘distributions’ rather than salary.  When money is funneled through an S corporation, the recipient doesn’t owe Social Security or Medicare taxes on it, nor can the source of revenue be traced.”

Certainly, we don’t bemoan President Biden for sheltering personal income via the tax advantages of Delaware’s General Corporation Law.  Though we do recognize the inherent hypocrisy of his administration’s push for a global minimum tax on corporations.  But that’s a story for another day…

Why Grubby Politicians like Joe Biden No Longer Get All the Breaks

We don’t know if Joe Biden and Ted Nicholas ever met.  Perhaps in the 1960s, Biden purchased confections from “Peterson’s House of Fudge,”  in Wilmington.  Who knows?

But if so, it is unlikely that Nick thought very highly of him.  We don’t like to put words into the mouth of the deceased, or anyone for that matter.  So rather, we’ll turn to Nick for insights.  What follows is the dedication from his 1975 book, “How To Publish a Book and Sell a Million Copies”:

“Perhaps the most precious and important right for all free people is freedom of speech.  In America we are guaranteed this right under the First Amendment of the Constitution.

“In dictatorships it is no accident that as soon as leaders assume power, one of their first acts is to take away the citizens’ freedom of expression.  Censorship and control of the printing presses are sought by all despots.

“This book is dedicated to the real unsung heroes of all human societies—the writers and publishers who, through their efforts, keep everyone free.”

Nick grew “The Company Corporation”, into the largest incorporating company in the world.  When he sold it, in 1991, he’d helped over 300,000 clients bypass lawyers when forming a corporation.  The majority of these corporations were Delaware corporations.

The way Nick saw it, grubby politicians like Joe Biden and other fat cats shouldn’t get all the breaks.  Everyone should…including you!

Tax benefits and deductions.  Limited liability.  Maximum privacy.  You name it…

Here’s a small selection of Nick’s ad copy…

“Average taxpayers, you and I, are getting screwed.

“The new law doesn’t bother the rich fat cats much.  They still have loopholes galore.  Let’s face it.  They always will.

“But recently I ran across a workable angle.  It’s cheap.  And it’s legal.  It’s meant for the rich.  But it’s perfect for us little guys.  You don’t need any money.  And we can get the same breaks the rich get.

“I can hardly believe it.  Catch this.  I formed a corporation.  Of my own.  For peanuts.

“It’s my way of fighting back.”

Ted Nicholas died on February 10, 2020, at 85 years old.  But his gift to the little guy entrepreneur lives on.

“The world does not reward average people,” said Nick, “so I will be extraordinary.”

Sincerely,

MN Gordon
for Economic Prism

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