Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How IKEA is structured to minimize tax and maximize control

economist.com

Post reply on HN
Print view View original

61–70 of 120 posts

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

#61

Post by loewenskind »

ebaysucks wrote: post #19
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'm an anarcho-capitalist i.e. I've never seen proof for objective morality of any sort (including democracy) hence I support free markets to make the rules of society by group selection and feet voting. Just as humanity doesn't need a forced state religion to be religious, humanity doesn't need a forced tax system to be social. Please consider this view point. Don't confuse personal ethics and political morality.

>I'm an anarcho-capitalist

Do you have any good (online) literature for your position? It seems to me that having money/bartering implies a government no matter how you slice it. I can see potential with some anarchical systems, just not primitivism or ancap.

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

#62

Post by jimmybot »

kalpeshjoshi wrote: post #40
jimmybot wrote: post #27

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 general…

First, let's not forget that Walmart is the largest retailer in the world, for several reasons. But skimping on state and local tax regulation is something that Walmart has done over the years. Most states (not all cities tho) want a company like Walmart, it provides lots of jobs (we won't take about labor wages), and creates perpetual economic growth in a neighborhood / city / region through a whole ecosystem of con…

I mentioned Walmart because they sell some furniture too, though the article points out that IKEA doesn't really have true competitors. You're right, Walmart has avoided quite a bit of tax, and that would be unfair relative to other big box stores or supermarkets. However, I don't think the magnitude of tax savings is anywhere near that of IKEA running in the guise of a charity.

In any case, I'm certainly not arguing for Walmart. I'm merely pointing out that these tax avoidance schemes lead to unfair competition when not all players have access to the same schemes. It should be a level regulatory environment for everyone.

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

#63

Post by cletus »

jacques_chester wrote: post #52
arethuza wrote: post #45

Earlier quoted context omitted.

If you keep a tight control on the number of shareholders you have there is no reason why you have to go public - of course the reporting standards are going to be lower for private companies, if you don't want that overhead don't go public!

Indeed some companies use multi-level shareholdings to avoid scrutiny (warning: I am not a corporate lawyer and corporations law varies remarkably from country to country. Do not rely on this advice.). Say you have Actual Company, Inc (ACI). ACI can't have more than 500 shareholders or it must go public. So instead ACI issues only 500 shares. 250, say, are kept by the 2 founders. The other 250 are divided up as the s…

In the US this won't avoid the 500 shareholder limit. This came up in the discussion about Goldman's Facebook investment vehicle. The SEC can make a determination about effective shareholders.

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

#64

Post by lionhearted »

loewenskind wrote: post #58
jimmybot wrote: post #27

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 general…

>gives an unfair advantage to IKEA over Target, Walmart Ugh. You correctly note that tax avoidance is an unfair advantage but list among your victims some of the biggest companies in the world. Do you think Walmart is at a disadvantage? They almost certainly avoid more taxes than IKEA (if nothing else, because they make a lot more money). When Adam Smith wrote about "the invisible" hand, he noted that it would only w…

> When Adam Smith wrote about "the invisible" hand, he noted that it would only work if companies weren't allowed to grow too large.

Citation? I've read most of Wealth of Nations, and I recall Smith spending a lot of time on monopolies - where the monopoly can constantly undersupply the natural demand, and charge premiums because of it.

But I didn't recall anything about companies becoming too large... in fact, he wrote famous defenses of companies like East India importing, so long as they didn't receive exclusive (monopoly) trade rights. That was one of the larger companies of the day.

But Smith wrote a lot, so I might've missed it. Cite?

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

#65

Post by pmjordan »

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've observed that many people react badly when presented with instructions that come with a purchased product. ("I can't/don't read manuals," etc.) This bias tends to sabotage their attempts to follow them once they do concede that the instructions might be useful. ("See? These instructions are useless, that's why I never bother with them.") Combine this with the fact that spatial-temporal reasoning skill seems to vary quite a bit across the population.

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

#66

Post by DanielBMarkham »

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"]

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.

I've heard this argument before, and this is going to sound pedantic, so I apologize, but just exactly how rich can you be if you don't spend your money on things?

Or, put a different way, the rich only (bother us/owe more/are easy targets/need to pay up) because a) they don't have to work to live, and b) they buy and own cool stuff we want.

Obviously being able to live without working is a goal for everybody, so I'm tossing that out. What I'm left with is that we identify rich people by the stuff they buy or own. Without that, you wouldn't really have rich people -- or if you had them, as far as their participation in society they would be just the same as anybody else. They'd be invisible -- both in their appearance and in their stress on the social fabric.

So if you want to sack the rich, do it by taxing the things that we identify with being rich -- buying and owning stuff. That way -- poof! -- there are instantly less rich people in the world, and you've created a stable societal goal for people to strive for which kind of boils down to "make as much money as you need to not work" which is a laudable goal for every society, I would think. Right?

Not trying to argue, just thinking out loud. I've spent some time thinking about this, and I think a consumption tax could be supported by folks no matter what their political philosophy or party. The idea is inherently less political than an income tax. Of course, we'll all get hung up on whether it should be progressive or not, but hey -- baby steps.

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

#67

Post by pchristensen »

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?.

Try buying some assemble-your-own furniture from Target or Wal-Mart. You'll get that much more appreciation for the ease of assembling IKEA furniture and how much sturdier the IKEA furniture is.

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

#68

Post by jasonlotito »

ErrantX wrote: post #51
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…

I'm honestly not sure it makes furniture cheaper, either. Here in the UK at least I found IKEA to be about 10-15% more expensive to local furniture stores. And about on par (about 2-5% more expensive) with national chains. I'm in the process of kitting out my new house and, to take an example of a book case; this is the sort of think I am after: http://www.ikea.com/gb/en/catalog/products/S99823013 - IKEA: £160 - Home…

Are all those examples of "flat-pack furniture"? Self build is the cost plus labor plus the cost of the material to build, etc.

Simply looking at the final product and comparing the price ignores a lot of what makes IKEA what it is, and what they provide.

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

#69

Post by ebaysucks »

loewenskind wrote: post #61
ebaysucks wrote: post #19

Earlier quoted context omitted.

I'm an anarcho-capitalist i.e. I've never seen proof for objective morality of any sort (including democracy) hence I support free markets to make the rules of society by group selection and feet voting. Just as humanity doesn't need a forced state religion to be religious, humanity doesn't need a forced tax system to be social. Please consider this view point. Don't confuse personal ethics and political morality.

>I'm an anarcho-capitalist Do you have any good (online) literature for your position? It seems to me that having money/bartering implies a government no matter how you slice it. I can see potential with some anarchical systems, just not primitivism or ancap.

From the Chicago School of Economics, there is David Friedman with "The machinery of freedom". [1]

A large part of the Austrian school of economics is also ancap. A great overview of the insights today can be found in "Libertarianism today" by Jacob Huebert. [2]

[1] www.voluntaryistpunk.com/ebooks/The_Machinery_of_Freedom_.pdf [2] http://mises.org/store/Libertarianism-Today-P10394.aspx

Edit: You talked about money in a free market. For that topic I recommend "What has government done to our money?" by Murray Rothbard. [3]

[3] mises.org/books/whathasgovernmentdone.pdf

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

#70

Post by ErrantX »

jasonlotito wrote: post #68
ErrantX wrote: post #51

Earlier quoted context omitted.

I'm honestly not sure it makes furniture cheaper, either. Here in the UK at least I found IKEA to be about 10-15% more expensive to local furniture stores. And about on par (about 2-5% more expensive) with national chains. I'm in the process of kitting out my new house and, to take an example of a book case; this is the sort of think I am after: http://www.ikea.com/gb/en/catalog/products/S99823013 - IKEA: £160 - Home…

Are all those examples of "flat-pack furniture"? Self build is the cost plus labor plus the cost of the material to build, etc. Simply looking at the final product and comparing the price ignores a lot of what makes IKEA what it is, and what they provide.

Well true, but the end result is the same. First two (IKEA & Homebase) are flatpack. The local shop & second hand are pre-assembled (the second hand is real wood construction so was never flat pack), but it makes little difference.

Self build, sure, there is a labour "cost" - but you're looking at a couple of weekends max construction, so if you have the interest it's no biggie :) I only included it because I thought it would be interesting to encourage people to consider it as an option.

Post reply on HN