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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

#111

Post by eli »

dagw wrote: post #106
moomba wrote: post #104

Earlier quoted context omitted.

Never bought any furniture from Ikea. The furniture I have bought from other low end places generally has very low res and out of proportion drawings. Its not a crazy conspiracy that the manuals are not very well put together. If you think about it economically, they already have your money by the time you've opened the box and tried to piece your furniture together.

If you think about it economically they only have a tiny fraction of my money. Sure they have the $60 I just spend on a new side table, but they don't have the countless thousands I'll be spending on a new bed, bookshelf, kitchen, dining room table etc. etc. over the next decade. Why on earth wouldn't they want to try to grab that money as well.

Low end furniture competes on price more than brand. If you bought a really cheap side table, they know you'll probably but a really cheap bed -- whether it's made by them or not.

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

#112

Post by kalpeshjoshi »

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

yea true, again for taxes... And it should be noted that Accenture struck a deal with the Bermuda government (me thinks) to pay limited amounts on a fixed timeline, in any case, they were paying pennies (and got a lot of heat for it) while raking in billions.

Ireland, good find, hopefully the gov't can get more into their pot of gold :P

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

#113

Post by philwelch »

yummyfajitas wrote: post #99
philwelch wrote: post #97

Earlier quoted context omitted.

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

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.

This is categorically untrue. Social welfare and wealth redistribution, from the perspective of the rich, are a concession to the poorer classes in the interest of pacifying them and preventing a violent leftist uprising. Of course, this has to be done through the government rather than voluntarily because, for game-theoretic reasons, it can't be done voluntarily.

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

#114

Post by yummyfajitas »

philwelch wrote: post #113
yummyfajitas wrote: post #99

Earlier quoted context omitted.

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

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. This is categorically untrue. Social welfare and wealth redistribution, from the perspective of the rich, are a concession to the poorer classes in the interest of pacifying them and preventing a violent leftist uprising. Of course, this has to be done through the govern…

Most of the transfers are to old people, a group which is disproportionately unlikely to be poor or to engage in a violent uprising.

Of course, if the poor are truly as evil and dangerous as you say, wouldn't it be better just to wall them off from the rest of us? For the cost of welfare, we could triple the money we spend on the police.

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

#115

Post by pontifier »

CountHackulus wrote: post #89
pmjordan wrote: post #65

Earlier quoted context omitted.

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.

After watching a few videos from that show, I swear we have hired some of those people to do work on our rental properties. I have some pictures of bad work that I really need to put up on my blog.

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

#116

Post by philwelch »

yummyfajitas wrote: post #114
philwelch wrote: post #113

Earlier quoted context omitted.

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. This is categorically untrue. Social welfare and wealth redistribution, from the perspective of the rich, are a concession to the poorer classes in the interest of pacifying them and preventing a violent leftist uprising. Of course, this has to be done through the govern…

Most of the transfers are to old people, a group which is disproportionately unlikely to be poor or to engage in a violent uprising. Of course, if the poor are truly as evil and dangerous as you say, wouldn't it be better just to wall them off from the rest of us? For the cost of welfare, we could triple the money we spend on the police.

Most of the transfers are to old people, a group which is disproportionately unlikely to be poor or to engage in a violent uprising.

You're right, and there other self-interested motivations for rich people to support social welfare, including hedging against future misfortune, support of friends and loved ones who may not be as well off and who would be more expensive to support on an individual basis, and the fact that end-of-life health care is often expensive enough to matter even to the significantly wealthy.

Of course, if the poor are truly as evil and dangerous as you say, wouldn't it be better just to wall them off from the rest of us?

Where did I say the poor are evil? I'm accounting for self-interest, not making a moral argument.

Oppressing the poor in order to keep them from rising up against the ruling class has never worked. Taking care of the poor in order to prevent them from even wanting to rise up against the ruling class consistently works.

This isn't even a new idea. I ripped it off from Bismarck, who, "working closely with big industry and aiming to head off the Socialists, implemented the world's first welfare state in the 1880s." http://en.wikipedia.org/wiki/Otto_von_Bismarck#Bismarck.27s_...

As notahacker points out, a lot of this stuff is also a side effect of having a democracy. Having a democracy is perhaps an even better hedge against violent uprisings.

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

#117

Post by yummyfajitas »

philwelch wrote: post #116
yummyfajitas wrote: post #114

Earlier quoted context omitted.

Most of the transfers are to old people, a group which is disproportionately unlikely to be poor or to engage in a violent uprising. Of course, if the poor are truly as evil and dangerous as you say, wouldn't it be better just to wall them off from the rest of us? For the cost of welfare, we could triple the money we spend on the police.

Most of the transfers are to old people, a group which is disproportionately unlikely to be poor or to engage in a violent uprising. You're right, and there other self-interested motivations for rich people to support social welfare, including hedging against future misfortune, support of friends and loved ones who may not be as well off and who would be more expensive to support on an individual basis, and the fact…

You're right, and there other self-interested motivations for rich people to support social welfare,...

If that were true, there would be no need for force. We could make SS/medicare an opt-in scheme.

Where did I say the poor are evil?

If the poor will use violence unless they receive tribute, they are evil.

Oppressing the poor in order to keep them from rising up against the ruling class has never worked.

I'm only advocating separation. If the poor truly are dangerously violent, lets wall them off from the rest of us. A fence is pretty easy to police.

Oppression is only necessary if you need the labor output of the poor, which we manage to survive just fine without (in the US, the vast majority of the poor don't work at all).

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

#118

Post by philwelch »

yummyfajitas wrote: post #117
philwelch wrote: post #116

Earlier quoted context omitted.

Most of the transfers are to old people, a group which is disproportionately unlikely to be poor or to engage in a violent uprising. You're right, and there other self-interested motivations for rich people to support social welfare, including hedging against future misfortune, support of friends and loved ones who may not be as well off and who would be more expensive to support on an individual basis, and the fact…

You're right, and there other self-interested motivations for rich people to support social welfare,... If that were true, there would be no need for force. We could make SS/medicare an opt-in scheme. Where did I say the poor are evil? If the poor will use violence unless they receive tribute, they are evil. Oppressing the poor in order to keep them from rising up against the ruling class has never worked. I'm only a…

If that were true, there would be no need for force. We could make SS/medicare an opt-in scheme.

No, you couldn't. For game-theoretic reasons, it has to be mandatory to work.

If the poor will use violence unless they receive tribute, they are evil.

Again, I'm not making a moral argument at all. It's your own moral judgment to tar hungry people as "evil" for rising up against a wealthy ruling class--and expressing sentiments like that, quite frankly, reveals far more about you than about me.

If the poor truly are dangerously violent, lets wall them off from the rest of us. A fence is pretty easy to police. Oppression is only necessary if you need the labor output of the poor, which we manage to survive just fine without (in the US, the vast majority of the poor don't work at all).

The poor aren't "dangerously violent" unless they starve or otherwise slip into absolute destitution, at which point they will try and take what they can get from the rich. The entire history of violent revolution bears this out.

And I think you're misunderstanding this. I'm talking about the distinction between the richest 5% of society and the other 95%. Because that's roughly how the original problem--progressive taxation--is meant to break down anyway. And if you add up things like Medicare, Social Security benefits, and unemployment insurance--frankly, there's a lot of legitimate need for those things, even among working and middle class populations.

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

#119

Post by stinkytaco »

anamax wrote: post #110
stinkytaco wrote: post #98

Earlier quoted context omitted.

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…

> Nope, but hopefully I can elect people who will fix the problem. How is that working out for you? Or rather, when has it worked?

Considering the state of the US versus most of the world, my standard of living and my freedom to make these comments, pretty fucking good.

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

#120

Post by stinkytaco »

ebaysucks wrote: post #109
stinkytaco wrote: post #98

Earlier quoted context omitted.

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…

Government is an industry with extremely high barriers to entry (want to start a country? Win a war first) and customer lock in (don't like this country? have to leave your entire life behind). In other words, your argument is that a monopoly in a certain service, given the power to force customers into what it wants at the price it wants, will care more about you than a private entrepreneur just because they have to…

There's so much wrong with this argument I can't even think where to start. Democracy is not perfect because it's made up of people, but a system that gives people control is the best system. The democratic government in the US gives, among other things, critical access to information and regulation of self interested actors. It's the checks and balances that are important. Elected and non-elected officials, civil servants and private actors. Even if I bought your argument that the government is just some self interested autonomous agent (which I do not), we still have control, and most important information about it. That information gives us power.

A private entity does not answer to the public, not truly if there is no information. If they act in way that is unethical or undesirable, they simply hide it from the public. With no reliable information flow (forget for a moment the Internet would not exist in your governmentless world), there is no way of controlling these entities. It sounds peculiarly like feudalism.

No. The system is not perfect, but it is a system we control. It's a system that enables information exchange, money, regulation and the equitable standard of living that has ever existed in the history of the world. Not too bad.

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