Ikea founder leaves fortune to no one, structures it to ensure it lasts forever • Hacker News Board

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#101

Post by matthewmacleod » Fri, Feb 02, 2018, 1:56 PM UTC

dna_polymerase wrote: post #56

charlesdm wrote: post #35

Earlier quoted context omitted.

Avoidance, not evasion. If you're a very frugal person, it seems pretty normal to hate taxes. No point in saving on everything, yet then throwing x% away in taxes (yes, I am aware taxes fund a lot of good things, but at the same time a lot of money is wasted -- I'm sure Kamprad thought he could better manage and deploy that money)

Please cut the ’avoidance, not evasion’ bullshit. This scheme is outright evasion, legalized by lobbying in Brussels against national law. You know that otherwise you wouldn’t care to point out this nuisance.

I understand the frustration, but I really think this is an important distinction to make.

Evasion is solved by rigorously enforcing existing tax frameworks. Avoidance is solved by closing loopholes. They're two different problems—although they share some things in common—and they require two different solutions.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#102

Post by dx034 » Fri, Feb 02, 2018, 1:56 PM UTC

andrepd wrote: post #53

charlesdm wrote: post #35

Earlier quoted context omitted.

Avoidance, not evasion. If you're a very frugal person, it seems pretty normal to hate taxes. No point in saving on everything, yet then throwing x% away in taxes (yes, I am aware taxes fund a lot of good things, but at the same time a lot of money is wasted -- I'm sure Kamprad thought he could better manage and deploy that money)

Oh nice, if he thought he could use the money better, then sure, please carry on not paying taxes. Can I do the same? Or is that a privilege reserved for the mega-rich? Or let's call a spade a spade, and let's call tax evasion tax evasion.

Yes you can. Move to a country with low/no income taxes.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#103

Post by oblio » Fri, Feb 02, 2018, 1:56 PM UTC

mseebach wrote: post #55

pqs wrote: post #22

Earlier quoted context omitted.

But then they put the Swedish flag in front of each shop. What a hypocrisy!

The Swedish flags predates the Swedish welfare state by several hundred years (and IKEA predates it by a couple of decades).

The hypocrisy is that IKEA is now registered basically nowhere, technically in the Netherlands, but definitely not in Sweden.

How would you feel if Apple would keep portraying itself as an US company after moving its HQ to China? :)

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#104

Post by bmelton » Fri, Feb 02, 2018, 1:57 PM UTC

gaius wrote: post #86

bsbechtel wrote: post #60

Earlier quoted context omitted.

Not caring about money doesn't necessarily mean you are willing to pay more taxes than you are legally required to, especially a subjective amount that others deem 'reasonable'.

willing to pay more taxes than you are legally required to There is a material difference between that and actively seeking loopholes that are not available to ordinary people. Ikea is only possible because of the physical and legal infrastructure paid for by those ordinary people after all. Not that they will do anything of course, the Viking spirit is long dead.

If you aren't seeking out the loopholes that apply to you, then you are paying more in taxes than you are legally required to.

"legally required to" does not incur a balancing test between what is practicable vs the time it takes. If you're a regular, mid-income citizen, then there isn't likely to be a good ROI on hiring a dedicated accountant to find you loopholes. If you're making $200k a year, and you save 10%, hooray, you've saved $20k through tax avoidance, but since a CPA's average salary is ~$60k, then you'll have lost $40k. Perhaps there's a middle ground where you could employ a CPA for a finite amount of time for them to find you the obvious savings, and many people do. It's how companies like H&R Block exist.

If your income is $2,000,000 a year, then it is cost effective to hire the guy who can save you 12% a year vs. the guy who can save you 10% a year, even if the 12% guy costs 10% more, because while 10% guy saves you $200k (e.g., worth the $60k salary), while the 12% guy saves you $240k. Even though his $66k salary is $6k more than the 10% guy, he's saved you $40k more, which nets out to an extra $34k.

Anyway, I'm rambling, but what I'm hoping to illustrate is that many, many Americans routinely engage in tax avoidance by hiring a tax accountant that finds them deductions. The fact that Ikea does the same is not cause for scorn. The fact that it is mathematically stupid for them not to do so does not mean that it is practical for you to do so. Everyone's situation varies.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#105

Post by elmar » Fri, Feb 02, 2018, 1:58 PM UTC

viraptor wrote: post #45

> The foundation owns itself, so no Kamprad family members hold shares. Late stage capitalism... Anyway, I don't really get why the article claims he didn't care about money. It's known for a while that IKEA avoids taxes in many dodgy ways. If he really didn't care, the connected companies could pay a reasonable amount.

>"If he really didn't care, the connected companies could pay a reasonable amount"

He probably thought that the money would be better spent for the good of society by private institutions than by the government.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#106

Post by dx034 » Fri, Feb 02, 2018, 1:58 PM UTC

dna_polymerase wrote: post #56

charlesdm wrote: post #35

Earlier quoted context omitted.

Avoidance, not evasion. If you're a very frugal person, it seems pretty normal to hate taxes. No point in saving on everything, yet then throwing x% away in taxes (yes, I am aware taxes fund a lot of good things, but at the same time a lot of money is wasted -- I'm sure Kamprad thought he could better manage and deploy that money)

Please cut the ’avoidance, not evasion’ bullshit. This scheme is outright evasion, legalized by lobbying in Brussels against national law. You know that otherwise you wouldn’t care to point out this nuisance.

Sorry, but why is it the EU's fault if countries create tax incentives? I've read that previously in UK pro-Brexit media but never understood how that can be true. I'm pretty sure that neither the Netherlands nor Ireland were forced to create low-tax regimes.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#107

Post by rectang » Fri, Feb 02, 2018, 1:59 PM UTC

charlesdm wrote: post #84

andrepd wrote: post #53

Earlier quoted context omitted.

Oh nice, if he thought he could use the money better, then sure, please carry on not paying taxes. Can I do the same? Or is that a privilege reserved for the mega-rich? Or let's call a spade a spade, and let's call tax evasion tax evasion.

Want to stop avoidance? Make proper laws. If it's legal (even through lobbying), then it is legal. And frankly I don't see why you shouldn't if you legally can. But to each their own views on this. You know who can stop avoidance? Politicians. They need to take responsibility. Feel free to shame multinationals or HNWIs for not paying taxes, but at the end of the day avoidance is only possible because politicians (or…

> shoddy laws that aren't well thought out

The preservation of these loopholes is not accidental -- they are deliberately left there for avoiders to take advantage of in exchange for political donations. The two groups work together in a corrupt and unethical partnership, while the populace can only watch from the sidelines fuming.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#108

Post by zaptheimpaler » Fri, Feb 02, 2018, 1:59 PM UTC

chiefalchemist wrote: post #89

zaptheimpaler wrote: post #74

Earlier quoted context omitted.

If IKEA can generate a higher return on capital than generally available, it could make more sense to accumulate and compound the money for as long as possible so he can donate a bigger amount later. Hard to quantitatively compare to the utility of early philanthropy.

Capital? Maybe. Provided IKEA doesn't go tits up. What I'm suggesting is a form of portfolio diversity. And who's to say that if you invest in NPO X today that the "ROI" won't be significant5 or 10 years from now. Why not try to put a value on lives saved, impacted, etc.? So yeah. Use Capital as your only measuring stick and you're correct. But the real truth is, there's more to life than Capital. But of course the c…

I agree that there's much more to life than capital/money.

What I'm saying is its very very hard to put a value on life saved/changed and compare that to money. Is donating $1M to an NPO distributing malaria vaccines today better or worse than donating $2M worth of malaria vaccines in 2 years? Who knows? How would you even begin to compare those 2 scenarios? You'd have to translate the subjective costs of being sick, costs of a life, all the uncertainties around effectiveness of the vaccine, uncertainties around how well the NPO uses its capital etc. into a dollar value to compare.. there is no right answer there, its just too uncertain.

So if he did a similar calculation and decided more money later is better for the world than less money now, well I can't fault him because that calculation is infinitely complex. Seems like you are saying donating say 1% every year is better than donating 0 and then 100% at the end, but it is very hard to tell.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#109

Post by jjuel » Fri, Feb 02, 2018, 1:59 PM UTC

gaius wrote: post #86

bsbechtel wrote: post #60

Earlier quoted context omitted.

Not caring about money doesn't necessarily mean you are willing to pay more taxes than you are legally required to, especially a subjective amount that others deem 'reasonable'.

willing to pay more taxes than you are legally required to There is a material difference between that and actively seeking loopholes that are not available to ordinary people. Ikea is only possible because of the physical and legal infrastructure paid for by those ordinary people after all. Not that they will do anything of course, the Viking spirit is long dead.

I think everyone seeks loopholes. And certainly all businesses are seeking as many loopholes as possible. And as long as politicians are either business people or bought by business people the loopholes will exist. And we will be paying for those businesses in one way or another.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#110

Post by TheOtherHobbes » Fri, Feb 02, 2018, 2:00 PM UTC

ptaipale wrote: post #65

andrepd wrote: post #53

Earlier quoted context omitted.

Oh nice, if he thought he could use the money better, then sure, please carry on not paying taxes. Can I do the same? Or is that a privilege reserved for the mega-rich? Or let's call a spade a spade, and let's call tax evasion tax evasion.

Sure, call tax evasion tax evasion, but AFAIK Kamprad wasn't doing it. Authorities go very hard against tax evasion, the illegal thing. Tax avoidance is by definition things that are legal, not tax evasion.

In fact authorities are pretty lenient on tax evasion by the hyper-rich. The number of convictions and jail sentences isn't zero, but given the sums involved it's pitifully low.

This is partly a resource problem. If you can pay advisors to create an impenetrable network of shell companies through which money disappears five levels down, you can pay lawyers to defend you if something goes wrong.

The authorities are far more likely to go after - and jail - sole traders, smaller SMEs and consultants for five or six figure transgressions than near-billionaires with six, seven, or eight figure creative accounting.