Am I the only one that enjoy assembling flat-pack furniture and believe it is extremely easy?.
Which extends to - I can't understand how to put simple bits of engineering together because I'm so spiritual!
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.
Also, have you ever tried to hang a pair of doors straight? Their hinges have like 9 degrees of freedom, which doesn't really help. Plus I don't think it is actually possible on this TV cabinet I have, since it isn't actually square once you put a TV on it.
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 corporatism below. I don't. I just support anyone to avoid taxes as much as possible and oppose all forms of collectivism.
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 progressivity and exceptions. Then we could have a rational discussion about the overall level of taxation, or possible replacements for taxation, without the distracting class-warfare and favor-trading sideshows that dominate tax policy in conventional shallow politics.
exactly
Q: Why can't I set up my family's income as a charity? I'll give away 1% of earnings.
A: Because I can't afford lawyers, politicians and accountants to protect me when the government threatens to put me in jail.
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.
Makes your furniture cheaper... and your taxes higher.
The flexibility that success stories have to move around and chase better taxation rates makes taxation lower for the rest of us. The barbarians in the capital know that if they make conditions too unnice, the successful people will up and leave. The rest of us are free-loaders on the desire of countries to attract those groups.
If Sweden or Europe changed things to crack down on Ikea, they could move plenty of their operation to Singapore.
You'll have better luck with fair, broadly-based taxes
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
- Homebase: (2 or 3 units together to make that design) £140
- Local Furniture Store: £130 - £150
- Second Hand: £100 ish
- Self Build: about £85 plus my labour (plus; leaps and bounds better quality)
Off topic note; it's currently half built :D because it's a no brainer really to have built it myself once I sorted out the costings. Highly recommend building custom furniture if you have a bit of practical skill - next up is a decent desk (cost of £200 down to under £100 with self build)
Simply looking at the final product and comparing the price ignores a lot of what makes IKEA what it is, and what they provide.
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.
The guy's not a rapist or a neo-Nazi, he's just not a socialist. Get over yourself.
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.
To tell him not to participate here because he thinks differently than you is to say that your mind is not open to new ideas and that you cannot bear to be exposed to anything that comes from a different philosophical basis than the one upon which you were raised.
Can you see how that is anti-intellectual?
[edited to fixed a typo: "the" => "they"]
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.
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.
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 work if companies weren't allowed to grow too large. Once a company gets big enough it no longer has to participate in the market. Massive tax avoidance is just one of the many ways that companies like Walmart can use their size and power to keep small players out.
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?
I'm not saying IKEA doesn't have the same retail financial prowess with state regulators, but let's be fair, many corporations do what they can to get tax loopholes. Accenture, a global consulting powerhouse was incorporated in Bermuda strictly to avoid paying taxes on billions of dollars.
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.
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 sole assets of 250 other companies (ACI Holdings Number 1, ACI Holdings Number 2 etc), each issuing 500 shares.
This means that in one sense, ACI has only 252 shareholders. In another sense, it has up to 125,000 owners.
I believe Goldman Sachs used something like this tactic for the recent Facebook deal.
edit: I got it wrong. There's the "Double Irish" and the "Dutch Sandwich".
[http://wgbhradio.org/News/Articles/2011/1/29/For_Many_Compan...]
[1] Source: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
I personally prefer the economist article. I read it back in 06 and I've read a few more on the Ikea tax setup since then. It seems to still accurately represent the situation, some numbers might be out of date but the gist is the same. That ft.com article is a bit sparse, seemingly written as an update for people already aware of the issue, and as you say paywalled.
Thanks for the additional and up to date info though.
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.
> In an email from Ikea sent to the TT news agency, Kamprad admits that the Interogo Foundation in Liechtenstein exists and that it owns Inter Ikea Holding SA, which in turn owns Inter Ikea.
"Interogo Foundation is a company foundation whose only goal is to invest in the expansion of the company business and secure its long-term survival. In other words, the assets of the Interogo Foundation are held as financial security and are only used if Inter Ikea has financial difficulties," wrote Kamprad.
"The assets can also be used to support individual Ikea dealers who have financial difficulties or for philanthropic purposes. Interogo Foundation is controlled by my family and is administered by a board of directors consisting only of outside representatives." he added.
As an example:
Suez Tractebel, Energy Europe Invest en GDF Suez CC had a profit before tax : 4,8 bilion euro.
Together they payed 2,3 milion euro tax. This is a tax rate of 0,049%.
Oh these are the Gas & electricity companies in Belgium.
http://en.wikipedia.org/wiki/Howard_Hughes_Medical_Institute