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How IKEA is structured to minimize tax and maximize control

economist.com

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Re: How IKEA is structured to minimize tax and maximize control

#21

Post by meric »

zizee wrote: post #18
meric wrote: post #6

Earlier quoted context omitted.

How about a progressive consumption tax replacing the income tax to encourage savings? It might be impossible to implement... for now.

Replacing income tax with a consumption tax would see the super rich pay even less tax as they spend a smaller percentage of their income compared to those with a lower income. [edited to fixed a typo: "the" => "they"]

What it means is... The first $5000 of consumption will be tax free, the next $10000 at 5%, and the next yet at 15%, etc.

So, the super rich would indeed pay a smaller percentage of their income, only if they spend the same as an ordinary consumer, but they would pay much more tax (e.g. 60% after 1 million) if they spend everything they earn.

This would encourage them not to swap pieces of paper for real goods. It would make them have more money in the bank but less million dollar cars and yachts. The productivity saved from not producing those non-producing consumer goods can be used, e.g., on farming, so that food becomes cheaper for the general populace.

Re: How IKEA is structured to minimize tax and maximize control

#22

Post by ebaysucks »

gojomo wrote: post #7
ebaysucks wrote: post #2

Love it. Makes my furniture cheaper. The only thing unethical about it is that these tax avoidance schemes have inherit economies of scale - startups can't afford the advice. The solution is not to eliminate the tax paradises (which would cause a revolution btw), but to eliminate the tax code altogether. If your ideology insists on coercion than at least make it a flat rate. Edit: I get accused of supporting corporat…

Makes your furniture cheaper... and your taxes higher. Helps big companies and the politically-connected... hurts upstarts and people who focus on business not politicking. Makes people angry at tax distortions, not taxes themselves. So this sort of gaming doesn't advance your hopes at all. You'll have better luck with fair, broadly-based taxes, and structural protections against constant tinkering with both the prog…

Please consider public choice theory.

Government won't lower taxes on the middle class if they find a way to tax the rich. They'd just increase taxes on the rich and keep on taxing the middle class as before.

Tax levels are just a product of a) how much there is to take and b) how tax inelastic the subject is.

Re: How IKEA is structured to minimize tax and maximize control

#23

Post by gaius »

cturner wrote: post #15
gojomo wrote: post #7

Earlier quoted context omitted.

Makes your furniture cheaper... and your taxes higher. Helps big companies and the politically-connected... hurts upstarts and people who focus on business not politicking. Makes people angry at tax distortions, not taxes themselves. So this sort of gaming doesn't advance your hopes at all. You'll have better luck with fair, broadly-based taxes, and structural protections against constant tinkering with both the prog…

Makes your furniture cheaper... and your taxes higher. You can't produce evidence to support that. An entirely reasonable idea: the increased economic activity generated by Ikea success and happy, employed staff and nice affordable furniture more than offsets the tax revenue that would have been collected. The flexibility that success stories have to move around and chase better taxation rates makes taxation lower fo…

An entirely reasonable idea: the increased economic activity generated by Ikea success

But it doesn't work like that. We, as a society, don't let individuals or organizations decide what's best. We vote in a government who (in theory) decide the rules that apply to everyone, then they tax and spend accordingly.

I know it doesn't work like that, which is why you get situations like this (or like Bono campaigning for higher government spending, while squirreling his own money away where it can't be taxed). Hell, I reckon that a better use of my taxes would be supporting the luxury goods industry which is suffering during the recession, but I don't get to cancel my income tax and spend it on champagne and caviar instead...

Re: How IKEA is structured to minimize tax and maximize control

#24

Post by thailandstartup »

meric wrote: post #6
ebaysucks wrote: post #2

Love it. Makes my furniture cheaper. The only thing unethical about it is that these tax avoidance schemes have inherit economies of scale - startups can't afford the advice. The solution is not to eliminate the tax paradises (which would cause a revolution btw), but to eliminate the tax code altogether. If your ideology insists on coercion than at least make it a flat rate. Edit: I get accused of supporting corporat…

How about a progressive consumption tax replacing the income tax to encourage savings? It might be impossible to implement... for now.

I'm more a fan of an impossible-to-implement wealth tax instead. That would be fairer.

Re: How IKEA is structured to minimize tax and maximize control

#25

Post by ajtaylor »

forgottenpaswrd wrote: post #13

"FEW tasks are more exasperating than trying to assemble flat-pack furniture from IKEA" Am I the only one that enjoy assembling flat-pack furniture and believe it is extremely easy?.

I agree with you. I've never had any problems putting together their furniture.

Re: How IKEA is structured to minimize tax and maximize control

#26

Post by hjalle »

forgottenpaswrd wrote: post #13

"FEW tasks are more exasperating than trying to assemble flat-pack furniture from IKEA" Am I the only one that enjoy assembling flat-pack furniture and believe it is extremely easy?.

Most things are extremely easy, but there are some individual packages that are horrible. I remember putting up a wardrobe that seriously took a whole day to assemble. All parts were there though!

Re: How IKEA is structured to minimize tax and maximize control

#27

Post by jimmybot »

What's terrible about IKEA's whole tax avoidance scheme is that it gives an unfair advantage to IKEA over Target, Walmart, etc. who are all presumably paying expected amounts of corporate tax and additionally, by virtue of being public companies, provide a great amount of transparency versus IKEA.

Another example of a business built in part on a tax loophole--Amazon.com and its online brethren whose customers generally don't pay sales tax. That's a huge, unfair retail advantage compared to Barnes & Noble and other brick-and-mortar stores, especially since retail margins are generally so thin.

Re: How IKEA is structured to minimize tax and maximize control

#28

Post by zizee »

meric wrote: post #21
zizee wrote: post #18

Earlier quoted context omitted.

Replacing income tax with a consumption tax would see the super rich pay even less tax as they spend a smaller percentage of their income compared to those with a lower income. [edited to fixed a typo: "the" => "they"]

What it means is... The first $5000 of consumption will be tax free, the next $10000 at 5%, and the next yet at 15%, etc. So, the super rich would indeed pay a smaller percentage of their income, only if they spend the same as an ordinary consumer, but they would pay much more tax (e.g. 60% after 1 million) if they spend everything they earn. This would encourage them not to swap pieces of paper for real goods . It w…

I'm not sure how shutting down Porsche factories is going to make food cheaper? In western countries only a few percentage of people are in the business of producing food. By moving workers from building yachts into food production will not make food production cheaper.

This plan would see the rich hording money, rather than spending it on luxuries. The kind of luxuries that are produced by western economies. When the rich spend their money on frivolous luxuries, it helps redistribute their wealth to the workers producing those luxuries.

Re: How IKEA is structured to minimize tax and maximize control

#29

Post by thret »

forgottenpaswrd wrote: post #13

"FEW tasks are more exasperating than trying to assemble flat-pack furniture from IKEA" Am I the only one that enjoy assembling flat-pack furniture and believe it is extremely easy?.

I like it too, it is how I imagine real men spend their time.

Re: How IKEA is structured to minimize tax and maximize control

#30

Post by ugh »

endtime wrote: post #9
xtho wrote: post #4

Earlier quoted context omitted.

I generally enjoy reading hn but such right wing ideologies make me feel sick in the stomach. Please take into account when making such statements the US (or whereever you live) is not the world. And just because you got brainwashed after decades of conservative government doesn't mean the rest of the world is. But the rest of the world also participates in this community.

I generally enjoy reading HN, but reddit-style thought-policing like this makes me sick to my stomach. The guy's not a rapist or a neo-Nazi, he's just not a socialist. Get over yourself.

This is pure semantics but are you really comfortable calling anyone who doesn’t want a flat tax a socialist? Someone who doesn’t want a flat tax could have voted for any party in my country.
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