>... it’s important to understand how the “Delaware loophole” works: A company sets up a subsidiary in Delaware, and transfers an intangible part of its business there—say, its trademark or naming rights. Then its other locations outside of Delaware pay money to the subsidiary in order to use that trademark. Since intangible assets are not taxed in Delaware, the company doesn’t have to pay taxes on the money that was transferred to the subsidiary. The company can deduct the cost of the royalties on its state returns in other states where it operates, and thus avoid a large share of the state income taxes it would have otherwise owed. It is the laws of states other than Delaware that allow this system to work.

YC rightly recommends incorporating in Delaware because the state has a predictable structure of corporate law and courts that are expert in applying it.

Implying that incorporation in Delaware is inherently some kind of tax dodge is bordering on slanderous.

Your logic is either naive or you don't care about your fellow man. If it is the latter, I wish you your just deserts