7 ms·

Not caring about money doesn't necessarily mean you are willing to pay more taxes than you are legally required to, especially a subjective amount that others d

Not caring about money doesn't necessarily mean you are willing to pay more taxes than you are legally required to, especially a subjective amount that others deem 'reasonable'.

galfarragem 9y ago
And overpaying taxes will be always considered bad management. I don't think he and IKEA top management would ever want that.
rtpg 9y ago
this is such a weasely way to phrase agressive tax minimization. It's the "I spent all day eating Sam's Club food samples" of business. You didn't need to do it, you're helping no one but yourself, and you look bad afterwards.
gaius 9y ago
willing to pay more taxes than you are legally required to There is a material difference between that and actively seeking loopholes that are not available to ordinary people. Ikea is only possible because of the physical and legal infrastructure paid for by those ordinary people after all. Not that they will do anything of course, the Viking spirit is long dead.
- dx034 9y ago
  Not really. Corporate taxes and personal taxes are two very different things. Ikea didn't commit tax fraud (at least from what I heard), they just used structures to minimise taxes. Those weren't loopholes, they were made by countries for companies like Ikea. Companies utilising those structures aren't the problem. It's governments creating the opportunities. Same as with tax incentives for investments. You can't blame a company using tax incentives but you can blame the state/city/region that they created them.
  - sooheon 9y ago
    Companies own the governments that create those opportunities.
- bmelton 9y ago
  If you aren't seeking out the loopholes that apply to you, then you are paying more in taxes than you are legally required to. "legally required to" does not incur a balancing test between what is practicable vs the time it takes. If you're a regular, mid-income citizen, then there isn't likely to be a good ROI on hiring a dedicated accountant to find you loopholes. If you're making $200k a year, and you save 10%, hooray, you've saved $20k through tax avoidance, but since a CPA's average salary is ~$60k, then you'll have lost $40k. Perhaps there's a middle ground where you could employ a CPA for a finite amount of time for them to find you the obvious savings, and many people do. It's how companies like H&R Block exist. If your income is $2,000,000 a year, then it is cost effective to hire the guy who can save you 12% a year vs. the guy who can save you 10% a year, even if the 12% guy costs 10% more, because while 10% guy saves you $200k (e.g., worth the $60k salary), while the 12% guy saves you $240k. Even though his $66k salary is $6k more than the 10% guy, he's saved you $40k more, which nets out to an extra $34k. Anyway, I'm rambling, but what I'm hoping to illustrate is that many, many Americans routinely engage in tax avoidance by hiring a tax accountant that finds them deductions. The fact that Ikea does the same is not cause for scorn. The fact that it is mathematically stupid for them not to do so does not mean that it is practical for you to do so. Everyone's situation varies.
  - jessaustin 9y ago
    The difference between "many Americans" (actually other highly-taxed subjects are probably the same) and hideous unkillable corporate zombies like Ikea is that the little people use the tax laws as they are. The corporate monsters write the tax laws, to their own exclusive benefit, in every nation they invade. That's not an option for the little people.
    - abakker 9y ago
      There's a narrative here that says we got into this situation by the little people being uniformed and complicit. OTOH, it is rarely so simple, since many of the little people work for those companies. When your employer does this stuff, it is probably good for you.
- jjuel 9y ago
  I think everyone seeks loopholes. And certainly all businesses are seeking as many loopholes as possible. And as long as politicians are either business people or bought by business people the loopholes will exist. And we will be paying for those businesses in one way or another.
  - jessaustin 9y ago
    The word "loophole" itself encodes a sort of prejudice into our language, much like the phrase "automobile accident" instead of the more neutral "automobile collision". If by "loophole" one means a legislative mistake that catches legislators and lobbyists by surprise with its unintended consequences, then it denotes something that has never actually existed. People work for hundreds of hours on legislative terms, and other people pay hundreds of thousands of dollars to get those terms in front of the legislature for a vote. We need another word, that encapsulates the whole concept of a benefit that big business has created for itself via corruption.
    - 0xfeba 9y ago
      > If by "loophole" one means a legislative mistake that catches legislators and lobbyists by surprise with its unintended consequences, then it denotes something that has never actually existed. Yeah, no, it happens all the time. Church of Satan uses Religious Freedom law against anti-abortion legislation. https://www.cnbc.com/2018/01/25/satanists-say-missouris-abortion-law-violates-their-religious-beliefs.html https://www.cnbc.com/2018/01/25/satanists-say-missouris-abor...
      - jessaustin 9y ago
        Try again; your example is terrible. There is no "loophole" discussed at that link. According to that link, the "Satanists" claim that a particular law has been misinterpreted by abortion clinics, and that the law conflicts with 1A religious rights. The only way this could be related to a loophole would be if somehow the law gave some parties additional benefits they didn't have without the law, perhaps after modification to meet 1A requirements. The whole purpose of the law is to make obtaining an abortion more onerous, so who could possibly be getting such a benefit? The Bill of Rights has invalidated or modified laws in hundreds of legal cases. In none of those cases has it been considered the action of a loophole.
- troupe 9y ago
  Tax laws are designed to encourage certain types of behavior. Funding non-profits is one of those behaviors. IKEA is setup to fund a non-profit that has a mission that tax law is designed to encourage. If you wanted to donate all of your income, you could probably get similar treatment. Also keep in mind that IKEA still generates significant tax revenues in employment tax, sales tax, property tax, etc. In the US the property tax is what pays for the physical infrastructure you speak of.
viraptor 9y ago
As a friend accountant/layer said: there will always be people coming to us, spending 51k to avoid paying 50k of taxes, and we'll help them arrange that. Legal isn't the same as moral, so sometimes the legal limit becomes meaningless.
- bsbechtel 9y ago
  51k going to an accountant in your community is probably a more moral way to spend your money than 50k going to fund a war. If one is going to judge a client's morality by his eagerness to spend more money than his tax bill in order to avoid paying that bill, that same moral lens needs to be applied to the accountant knowingly charging his client more than the client would save in taxes.
  - dsfyu404ed 9y ago
    This. I'd pay $120 to a lawyer to get a $100 traffic ticket dropped.
  - wahern 9y ago
    OTOH, the fervor with which some people avoid taxes evidences a lack of civic responsibility. If people don't feel invested in their government to the point of spitefully taking a loss just to avoid paying a tax it makes it easier for ethically bankrupt people to assume the reigns of power. That kind of leadership is how we get into wars in the first place.
    - bsbechtel 9y ago
      That's a very broad generalization without any evidence to back it up as being anything more than an assumption. Considering one of the top ways the vast majority of the population avoids taxes is by writing off charitable donations, I'd say the truth is opposite of what you purport.
    - Jach 9y ago
      I don't think it's much evidence, if any, that civic responsibility is lacking. It's hilarious to think the contrapositive -- that not doing any inspection or effort or money-spending to validate and potentially legally 'avoid' what the authorities say is due and just paying the bill, evidences presence of civic responsibility. You can't just buy such things.

Not caring about money doesn't necessarily mean you are willing to pay more taxes than you are legally required to, especially a subjective amount that others deem 'reasonable'.

galfarragem 9y ago

And overpaying taxes will be always considered bad management. I don't think he and IKEA top management would ever want that.

rtpg 9y ago

this is such a weasely way to phrase agressive tax minimization. It's the "I spent all day eating Sam's Club food samples" of business. You didn't need to do it, you're helping no one but yourself, and you look bad afterwards.

gaius 9y ago

willing to pay more taxes than you are legally required to There is a material difference between that and actively seeking loopholes that are not available to ordinary people. Ikea is only possible because of the physical and legal infrastructure paid for by those ordinary people after all. Not that they will do anything of course, the Viking spirit is long dead.

dx034 9y ago
Not really. Corporate taxes and personal taxes are two very different things. Ikea didn't commit tax fraud (at least from what I heard), they just used structures to minimise taxes. Those weren't loopholes, they were made by countries for companies like Ikea. Companies utilising those structures aren't the problem. It's governments creating the opportunities. Same as with tax incentives for investments. You can't blame a company using tax incentives but you can blame the state/city/region that they created them.
- sooheon 9y ago
  Companies own the governments that create those opportunities.
bmelton 9y ago
If you aren't seeking out the loopholes that apply to you, then you are paying more in taxes than you are legally required to. "legally required to" does not incur a balancing test between what is practicable vs the time it takes. If you're a regular, mid-income citizen, then there isn't likely to be a good ROI on hiring a dedicated accountant to find you loopholes. If you're making $200k a year, and you save 10%, hooray, you've saved $20k through tax avoidance, but since a CPA's average salary is ~$60k, then you'll have lost $40k. Perhaps there's a middle ground where you could employ a CPA for a finite amount of time for them to find you the obvious savings, and many people do. It's how companies like H&R Block exist. If your income is $2,000,000 a year, then it is cost effective to hire the guy who can save you 12% a year vs. the guy who can save you 10% a year, even if the 12% guy costs 10% more, because while 10% guy saves you $200k (e.g., worth the $60k salary), while the 12% guy saves you $240k. Even though his $66k salary is $6k more than the 10% guy, he's saved you $40k more, which nets out to an extra $34k. Anyway, I'm rambling, but what I'm hoping to illustrate is that many, many Americans routinely engage in tax avoidance by hiring a tax accountant that finds them deductions. The fact that Ikea does the same is not cause for scorn. The fact that it is mathematically stupid for them not to do so does not mean that it is practical for you to do so. Everyone's situation varies.
- jessaustin 9y ago
  The difference between "many Americans" (actually other highly-taxed subjects are probably the same) and hideous unkillable corporate zombies like Ikea is that the little people use the tax laws as they are. The corporate monsters write the tax laws, to their own exclusive benefit, in every nation they invade. That's not an option for the little people.
  - abakker 9y ago
    There's a narrative here that says we got into this situation by the little people being uniformed and complicit. OTOH, it is rarely so simple, since many of the little people work for those companies. When your employer does this stuff, it is probably good for you.
jjuel 9y ago
I think everyone seeks loopholes. And certainly all businesses are seeking as many loopholes as possible. And as long as politicians are either business people or bought by business people the loopholes will exist. And we will be paying for those businesses in one way or another.
- jessaustin 9y ago
  The word "loophole" itself encodes a sort of prejudice into our language, much like the phrase "automobile accident" instead of the more neutral "automobile collision". If by "loophole" one means a legislative mistake that catches legislators and lobbyists by surprise with its unintended consequences, then it denotes something that has never actually existed. People work for hundreds of hours on legislative terms, and other people pay hundreds of thousands of dollars to get those terms in front of the legislature for a vote. We need another word, that encapsulates the whole concept of a benefit that big business has created for itself via corruption.
  - 0xfeba 9y ago
    > If by "loophole" one means a legislative mistake that catches legislators and lobbyists by surprise with its unintended consequences, then it denotes something that has never actually existed. Yeah, no, it happens all the time. Church of Satan uses Religious Freedom law against anti-abortion legislation. https://www.cnbc.com/2018/01/25/satanists-say-missouris-abortion-law-violates-their-religious-beliefs.html https://www.cnbc.com/2018/01/25/satanists-say-missouris-abor...
    - jessaustin 9y ago
      Try again; your example is terrible. There is no "loophole" discussed at that link. According to that link, the "Satanists" claim that a particular law has been misinterpreted by abortion clinics, and that the law conflicts with 1A religious rights. The only way this could be related to a loophole would be if somehow the law gave some parties additional benefits they didn't have without the law, perhaps after modification to meet 1A requirements. The whole purpose of the law is to make obtaining an abortion more onerous, so who could possibly be getting such a benefit? The Bill of Rights has invalidated or modified laws in hundreds of legal cases. In none of those cases has it been considered the action of a loophole.
troupe 9y ago
Tax laws are designed to encourage certain types of behavior. Funding non-profits is one of those behaviors. IKEA is setup to fund a non-profit that has a mission that tax law is designed to encourage. If you wanted to donate all of your income, you could probably get similar treatment. Also keep in mind that IKEA still generates significant tax revenues in employment tax, sales tax, property tax, etc. In the US the property tax is what pays for the physical infrastructure you speak of.

viraptor 9y ago

As a friend accountant/layer said: there will always be people coming to us, spending 51k to avoid paying 50k of taxes, and we'll help them arrange that. Legal isn't the same as moral, so sometimes the legal limit becomes meaningless.

bsbechtel 9y ago
51k going to an accountant in your community is probably a more moral way to spend your money than 50k going to fund a war. If one is going to judge a client's morality by his eagerness to spend more money than his tax bill in order to avoid paying that bill, that same moral lens needs to be applied to the accountant knowingly charging his client more than the client would save in taxes.
- dsfyu404ed 9y ago
  This. I'd pay $120 to a lawyer to get a $100 traffic ticket dropped.
- wahern 9y ago
  OTOH, the fervor with which some people avoid taxes evidences a lack of civic responsibility. If people don't feel invested in their government to the point of spitefully taking a loss just to avoid paying a tax it makes it easier for ethically bankrupt people to assume the reigns of power. That kind of leadership is how we get into wars in the first place.
  - bsbechtel 9y ago
    That's a very broad generalization without any evidence to back it up as being anything more than an assumption. Considering one of the top ways the vast majority of the population avoids taxes is by writing off charitable donations, I'd say the truth is opposite of what you purport.
  - Jach 9y ago
    I don't think it's much evidence, if any, that civic responsibility is lacking. It's hilarious to think the contrapositive -- that not doing any inspection or effort or money-spending to validate and potentially legally 'avoid' what the authorities say is due and just paying the bill, evidences presence of civic responsibility. You can't just buy such things.