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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

#81

Post by raphar »

bhavin wrote: post #59
kalpeshjoshi wrote: post #40

Earlier quoted context omitted.

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…

Small correction: Accenture was incorporated in Bermuda. But moved to Ireland in 2009, again for the tax purposes though! http://en.wikipedia.org/wiki/Double_Irish_Arrangement

Google scheme to lower corporate taxes :

http://www.businessweek.com/magazine/content/10_44/b42010431...

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

#82

Post by cafard »

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 don't suppose the sum total of items I've assembled from IKEA amounts to 10, but I must say I've never had a problem with it.

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

#83

Post by lukesandberg »

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…

You could argue that it makes your furniture cheaper, but isn't it more likely that the additional profit that IKEA accrues due to this complicated scheme is 1. siphoned directly to a small number of individuals 2. divided amongst the shareholders or 3. simply wasted on the tons of accountants and lawyers that it probably takes to keep this system running.

Even if its not the case (at least not entirely) then you can still argue that the fact that IKEA is doing this is anti-competitive, which is surely against your ideology of anti-collectivism because it distorts natural market forces.

Even someone adamantly in the Chicago school of economics would be against a scheme like this because it implies that IKEA is effectively able to compete under markedly different market conditions than its competitors.

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

#84

Post by fshaun »

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…

Could you elaborate on the fixed costs of the self-build option? I'm curious what tools and experience you have. If I tried to build that I imagine I'd end up paying more in medical bills from banging my head in frustration. It does sound fun though.

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

#85

Post by alexg0 »

thailandstartup wrote: post #24
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.

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

It exists in most countries, in a form of estate or death tax. Also has same problem, as it forces people subject to it, to spend on accountants and lawyers to minimize it.

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

#86

Post by JoachimSchipper »

nika wrote: post #44
davidw wrote: post #32

Earlier quoted context omitted.

People's ideologies do make other people angry though. Which is why they should be aired on other sites.

IS that the fault of the minority who thinks different and then angers the majority? Or is that he fault of the majority who is so sensitive it cannot tolerate a minority that doesn't agree absolutely completely?

As far as I can tell, the majority just wants the politics debates to stop.

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

#87

Post by ErrantX »

fshaun wrote: post #84
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…

Could you elaborate on the fixed costs of the self-build option? I'm curious what tools and experience you have. If I tried to build that I imagine I'd end up paying more in medical bills from banging my head in frustration. It does sound fun though.

I'd be pleased to!

So, basic requirements for a bookshelf are:

- Decent power drill/screwdriver (the battery type)

- Tenon Saw (the sort that is fixed with a metal bar to the top for straight cuts)

- Set square

Upfront you're looking at £40-£55, probably, for adequate tools. However I consider it reasonable that anyone practically minded will have some of these anyway (I bought myself a set when I bought my house last year and they have already proved their worth :)).

The main part of the project is careful design, figuring out the exact dimensions of the pieces you need (sketchup is good for this, or graph paper). Then you can go to the nearest hardware store (I live in a medium sized town and we have at least 5 places I can go to) who will provide the wood cut to length for you.

The only real sawing you need to do is fiddly bits - for example I have to fit mine around skirting board at one point, so need a notch.

In terms of construction, that's fair easy. Wood is really forgiving to work with as long as you are sensible about it :) my design is very simple. I have a piece of wood for the base, with the sides going up to the roof - they are secured top and bottom for rigidity. On both sides I have batons secured horizontally at the intervals I want my shelves, then each shelf just sits on that.

If you get nice thick wood (18mm or more) and don't make the shelf length too long (i.e. about about 80cm) that will work great!

Pre-drill holes first - make sure you use a wood bit substantially smaller than your screw - and make sure you have decent wood screws of the right length.

Bookshelves are pretty simple once you have pieces of wood the right length. Cutting yourself will make it harder, but not impossible :)

EDIT: everything is 90 degree angles, which simplifies things a lot. I'm currently working on a plan for my desk which involves Z shaped legs :) cutting the angles on that will be fun!

Making furniture is wildly rewarding; particularly for me as my dad is pretty practical in terms of DIY so it's some common ground for us!

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

#88

Post by loewenskind »

lionhearted wrote: post #64
loewenskind wrote: post #58

Earlier quoted context omitted.

>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 wr…

I don't have my sources handy, but this:

>he wrote famous defenses of companies like East India importing

Sounds wrong to me. There is some discussion of it here: http://adamsmithslostlegacy.blogspot.com/2011/01/claims-for-...

"Also chartered companies were well known as witnessed by Adam Smith’s negative assessment of chartered companies in general and the East India Company in particular, contained in the Wealth of Nations."

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

#89

Post by CountHackulus »

pmjordan wrote: post #65
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 v…

If you've ever watched Canada's Worst Handyman, you'll see that this kind of attitude is quite prevalent with them. Now I know that this doesn't give us causation, but it's a pretty strong correlation.

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

#90

Post by rtghnyhjm »

dagw wrote: post #33
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 bought some flat-pack furniture from some of IKEA's competitors. After having struggled through putting that together I have to say I have new found respect for the amount of thought and design IKEA must put into how their furniture goes together.

It seems to be a thing of - "I'm too cultured and refined to understand science and maths".

Which extends to - I can't understand how to put simple bits of engineering together because I'm so spiritual!

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