WaPo article

https://www.washingtonpost.com/outlook/2021/10/07/tax-shelters-states-pandora/

" South Dakota’s history as a domestic tax haven dates to 1983, when the state legislature voted to lift all durational limits on trusts. Previously, South Dakota — like all but two other states — followed the “rule against perpetuities,” inherited from English common law, which generally prevented trusts from lasting much longer than three generations. And the two states that didn’t follow the rule — Idaho and Wisconsin — weren’t terribly attractive trust fund destinations because they imposed state tax on trust income. With the 1983 law, South Dakota became the first state to allow trusts to exist free of state income tax forever.

The opportunity to establish a perpetual “dynasty trust” with no state income tax induced many of the richest American families to locate their trusts in South Dakota. " Other states copied South Dakota.

" The biggest loser in all this is the U.S. Treasury. Carefully designed, a South Dakota dynasty trust can operate as a perpetual estate-tax-avoidance machine. " Also enumerates other outrages created by state tax haven law.

This article argues that states should be free to improvise, but not create tax doges to undermine our federal government or drain money from other states' governments.

However, " Not all of the blame lies with the states that have carved out niches for themselves as domestic havens. The dynasty trust and community property trust strategies exploit loopholes in federal law that Congress — if it cared — could close. "