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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

#91

Post by dantheman »

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…

Smith was wrong about quite a lot, including stuff that was known at that time. For instance, Smith believed in a labor theory of value - this to a great extent influenced Marx, IIRC. They were both wrong, Marx disastrously so.

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

#92

Post by rtghnyhjm »

jacques_chester wrote: post #53
Tichy wrote: post #42

Earlier quoted context omitted.

I don't completely get it - if they are a charity in the Netherlands, does it automatically exempt them from paying taxes all over the world?

A former I-banker of my acquaintance once tried to explain schemes like these to me. There's one call the "Double Dutch Sandwich", involving sending the money on a roundtrip through Holland, then Ireland, then Holland again. Or was it the other way around? Either way, it made me think fondly of PHP spaghetti code. edit: I got it wrong. There's the "Double Irish" and the "Dutch Sandwich".

I think the Dutch Sandwich is something like - you move all the money to Netherlands, so no tax in the rest of Europe (common market) then to a Dutch owned off-shore tax haven like the Dutch Antilles - so you pay no tax in the Netherlands either.

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

#93

Post by hippich »

sudonim wrote: post #74

The story would be much different if Ikea's owners were American. American citizens don't have the same affordances as foreign nationals when it comes to tax minimization. If these foundations for Ikea were majority owned by Americans, they would be subject to taxation by the IRS, regardless of in which country they were created.

If you are big enough and you do not rely only on US market - change country where you live.

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

#94

Post by hippich »

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…

Re: Amazon - all products from amazon have to be shipped. There is no sales tax, but there is shipping charges. Not quite the same, but consumer do not care usually.

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

#95

Post by sanj »

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?.

Not a bit!

http://www.youtube.com/watch?v=GjDp0TAZUQI

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

#96

Post by endtime »

ugh wrote: post #30
endtime wrote: post #9

Earlier quoted context omitted.

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.

I was being a little facetious, yes, but if someone to be actually sickened by ebaysuck's position then that constrains my prediction of his beliefs a little more than just not wanting a flat tax for e.g. practical reasons. In other words, I don't think just anyone who doesn't want a flat tax would say what xtho said.

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

#97

Post by philwelch »

DanielBMarkham wrote: post #66
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"]

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/nee…

The argument for rich people paying more tax isn't because we don't like them, it's because government is expensive and we can't afford it without rich people subsidizing everyone else.

Keep in mind that rich people also have more of a vested interest in maintaining the system, so it's not entirely unfair to them, either.

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

#98

Post by stinkytaco »

ebaysucks wrote: post #22
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…

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.

Public choice theory assumes that Ikea will act in a way that benefits it as an organization (and its shareholders) and fuck the rest of you. Public choice theory essentially states that everyone is a self interested actor, the difference is that I have some control over those actors if they are elected officials, and none if they are a private company. Can I vote with my wallet? Sure, but be honest with me here, how much power does that actually give you? If a chemical company is dumping waste how do I stop doing business with everyone who does business with that company?

We can't, we don't have the information or the power. Instead we elect officials that do have the information and give them the power. This applies to all situations in which I simply don't have the perspective to make the decision, including taxes. Do I think the tax system is screwed up? Sure. Do I think that eliminating it will fix the problem? Nope, but hopefully I can elect people who will fix the problem.

I don't get how people want to put more power in the hands of private organizations instead of one they at least ostensibly control.

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

#99

Post by yummyfajitas »

philwelch wrote: post #97
DanielBMarkham wrote: post #66

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. 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/nee…

The argument for rich people paying more tax isn't because we don't like them, it's because government is expensive and we can't afford it without rich people subsidizing everyone else. Keep in mind that rich people also have more of a vested interest in maintaining the system, so it's not entirely unfair to them, either.

Rich people have a vested interest in maintaining public goods (roads, police, military), but such goods comprise a minority of the government.

Most government spending is simply taking money from some people and giving it to other people. This is explicitly not in the interests of the rich.

http://www.usgovernmentspending.com/year2009_US.html

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

#100

Post by vaksel »

pchristensen wrote: post #67
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.

damn straight...my sister bought a bed from some non-Ikea store and I helped assemble...and it took me a whole day.

Seriously, when I opened that box, all I got was a bunch of pieces of wood and a bag full of screws.

Meanwhile, my bed was bought from Ikea and it took only an hour and a half.

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