7 ms·

IKEA also has a will to abuse them to a degree that their peers don’t, and we should judge them as less ethical for it.

johnp314 6y ago
'abuse' is a subjective word, you could have left off the 'ab' and you sentence would still be correct, arguably more correct. Also, why not consider that by using the complex web of tax laws to their advantage allows them to sell products at a lower price. This allows folks with lower incomes to enjoy similar products to those who can afford getting their stuff from more posh places. One could judge Ikea to be more ethical for this practice.
- Jochim 6y ago
  This is the same kind of mental gymnastics that gave us trickle down economics. The societal ethics, morality and the spirit of the law should all be taken into account when judging behaviour. Exploiting tax structures in order to conceal income is absolutely immoral and shouldn't be tolerated. This is especially egregious when the tax loopholes are effectively gated behind behing a multi-national corporation. It leads to even greater concentrations of wealth in the hands of these companies which damages the health of the local markets they operate in.
  - omgwtfbyobbq 6y ago
    To be fair, trickle down economics is just fantasy. Tax avoidance is something everyone with a 401k does and is encouraged by the tax code. If there's something unique about what they're doing, especially as a result of them lobbying for certain parts of the tax code, then I can see it being judged harshly. If anyone can do what they're doing, then I don't see it as particularly negative.
    - Jochim 6y ago
      A 401k has the specific purpose of helping individuals fund their retirement years, something society has agreed is worth providing some benefit for. There is an element of intention to the exemption and it serves a specific purpose. > If anyone can do what they're doing, then I don't see it as particularly negative. Typically not just anyone can do this, smaller firms do not have the resources set-up these schemes. Smaller firms are also much more likely to be slapped down by the government. The result of this is that larger corporations are further advantaged. I think attempting to equate personal and corporate taxation is a mistake. Corporations are increasingly transnational in a way that people cannot be, and they are leveraging not just local tax codes, but often established treaties and differences between national tax codes that were introduced with different intent.
      - lotsofpulp 6y ago
        >A 401k has the specific purpose of helping individuals fund their retirement years, something society has agreed is worth providing some benefit for. There is an element of intention to the exemption and it serves a specific purpose. A 401k has the specific purpose of helping large businesses maintain a competitive advantage over small businesses. If the government wanted to help individuals fund their retirement years, then there is no reason to involve employers in the tax code. They could simply issue the same rules and contribution limits for IRAs. But they don't. They punish you if you're employed by an employer that doesn't offer a 401k, by setting your contribution limit to a paltry $6k while 401k participants get tens of thousands, and your contribution limit is zero if your spouse is eligible for a 401k and your income is over a certain amount.
        ashtonkem 6y ago
        While there are certainly issues in the tax code, you’re absolutely just making up the history and intent of the 401k. The 401k was not setup to help big business, quite the opposite. They were setup as an explicit alternative to the pension systems that historically were how employees retired, and pensions absolutely favor large companies that can afford them. 401k programs allow much more employee choice and mobility, which they’ve arguably achieved.
  - t-writescode 6y ago
    Immoral or shrewd?
    - Jochim 6y ago
      It's possible to be technically correct but still be an asshole. Making use of the ability to employ considerable resources to reduce your corporation's tax burden in ways that organisations without those resources cannot is absolutely a violation of the social contract surrounding taxation, which typically follows the convention that those who profit the most from society should return the most. As a result it's no longer shrewd but immoral.
      - t-writescode 6y ago
        Even if the tax structure they're using enables them to hire more employees so those employees can survive more comfortably?
        Jochim 6y ago
        That assumes that they need more employees in the first place. Even then I don't believe companies hiring more employees is necessarily a good thing, unless you believe in work for work's sake. Robust corporate taxation pays for decent social safety nets/UBI, such that people aren't at the mercy of the whims of whatever mega-corp they're dependent upon for survival. This has the added benefit of naturally improving wages and worker's rights, while allowing for the removal of a minimum wage. It also has the added benefit of decoupling artistic expression from corporate funding.
        t-writescode 6y ago
        Do you think your arguments against the tax code and increased employment presuppose a more perfect world than we have and increased employment could be considered an intermediate step along the way? That is, right now, we don't have UBI and the safety net, at least in the US, is very weak, so employment and decreased unemployment _are_ necessary for the time being and the ideal state described here is many more steps away than the current status quo.
- saalweachter 6y ago
  > Also, why not consider that by using the complex web of tax laws to their advantage allows them to sell products at a lower price. Don't business taxes (whether US taxes on profits or European VAT) ignore the costs of goods?
lotsofpulp 6y ago
Which degree should we start judging at? When people deduct taxes for donations to universities to increase the odds of their child being accepted? When people deduct taxes for charity to their church/temple/organization/other tribe in order to direct resources in a way that might benefit them more directly versus the nation as a whole? It's either legal or it's not. If you want the "abuse" to stop, then elect the legislators that will make the loopholes illegal.
- ashtonkem 6y ago
  You seem to be making the argument that if it’s legal, it’s not immoral. I reject this argument completely. By necessity the law does not (and cannot) cover every single aspect of human behavior. Just because what IKEA is doing is legal does not make it right. Nor is it inappropriate for a private citizen to condemn behavior they disapprove of, whether or not it’s legal. As far as where the ethical line is, that is a very complicated subject not conducive to generic discussion. But I am extremely certain that “we configured our multi-billion dollar international furniture business as a non-profit” is certainly well on the wrong side of the line. We can discuss other scenarios in their appropriate context, but the existence of other grey areas does not excuse the unethical behavior of IKEA here. I do wish legislators would get their <explicative deleted> together and fix the tax code so that IKEA will pay their fair share, but condemning them for their behavior is a necessary prerequisite to that change actually happening. One can’t chastise other citizens for complaining about unethical behavior and suggest that instead someone else should change the law, that makes literally no sense. I have no direct capability to change the law, and it’s incoherent of you to tell me to stop complaining about it until the law is changed.
  - lotsofpulp 6y ago
    >You seem to be making the argument that if it’s legal, it’s not immoral. Yes, I would say that legally reducing one's taxes is not immoral. >By necessity the law does not (and cannot) cover every single aspect of human behavior. Yes, but in the case of tax law, the complications are created specifically to allow loopholes, and/or to allow the government to not have to transparently state costs. I would posit that any goal of tax deductions is more transparently accomplished by the government spending the cash outright and having to account for it. >Just because what IKEA is doing is legal does not make it right. In the context of tax law, I think it's all fair game. If the people want to close loopholes, then close them for everyone. As a business, I'm going to do whatever I need to maintain a competitive advantage. As a voter, I'm going to support legislation that levies taxes according to the quality of life I think people should have in society.
pvarangot 6y ago
There's simply no other furniture retailer the size of IKEA, by far. So we actually don't have anyone else to compare to. Someone defending IKEA could argue that if companies like Walmart of Target, which I think are the closest competitors to IKEA, were in the same position they would do even more nefarious tax evasion. It's a "lesser evil" argument but it does ring kind of true.

'abuse' is a subjective word, you could have left off the 'ab' and you sentence would still be correct, arguably more correct. Also, why not consider that by using the complex web of tax laws to their advantage allows them to sell products at a lower price. This allows folks with lower incomes to enjoy similar products to those who can afford getting their stuff from more posh places. One could judge Ikea to be more ethical for this practice.

Jochim 6y ago
This is the same kind of mental gymnastics that gave us trickle down economics. The societal ethics, morality and the spirit of the law should all be taken into account when judging behaviour. Exploiting tax structures in order to conceal income is absolutely immoral and shouldn't be tolerated. This is especially egregious when the tax loopholes are effectively gated behind behing a multi-national corporation. It leads to even greater concentrations of wealth in the hands of these companies which damages the health of the local markets they operate in.
- omgwtfbyobbq 6y ago
  To be fair, trickle down economics is just fantasy. Tax avoidance is something everyone with a 401k does and is encouraged by the tax code. If there's something unique about what they're doing, especially as a result of them lobbying for certain parts of the tax code, then I can see it being judged harshly. If anyone can do what they're doing, then I don't see it as particularly negative.
  - Jochim 6y ago
    A 401k has the specific purpose of helping individuals fund their retirement years, something society has agreed is worth providing some benefit for. There is an element of intention to the exemption and it serves a specific purpose. > If anyone can do what they're doing, then I don't see it as particularly negative. Typically not just anyone can do this, smaller firms do not have the resources set-up these schemes. Smaller firms are also much more likely to be slapped down by the government. The result of this is that larger corporations are further advantaged. I think attempting to equate personal and corporate taxation is a mistake. Corporations are increasingly transnational in a way that people cannot be, and they are leveraging not just local tax codes, but often established treaties and differences between national tax codes that were introduced with different intent.
    - lotsofpulp 6y ago
      >A 401k has the specific purpose of helping individuals fund their retirement years, something society has agreed is worth providing some benefit for. There is an element of intention to the exemption and it serves a specific purpose. A 401k has the specific purpose of helping large businesses maintain a competitive advantage over small businesses. If the government wanted to help individuals fund their retirement years, then there is no reason to involve employers in the tax code. They could simply issue the same rules and contribution limits for IRAs. But they don't. They punish you if you're employed by an employer that doesn't offer a 401k, by setting your contribution limit to a paltry $6k while 401k participants get tens of thousands, and your contribution limit is zero if your spouse is eligible for a 401k and your income is over a certain amount.
      - ashtonkem 6y ago
        While there are certainly issues in the tax code, you’re absolutely just making up the history and intent of the 401k. The 401k was not setup to help big business, quite the opposite. They were setup as an explicit alternative to the pension systems that historically were how employees retired, and pensions absolutely favor large companies that can afford them. 401k programs allow much more employee choice and mobility, which they’ve arguably achieved.
- t-writescode 6y ago
  Immoral or shrewd?
  - Jochim 6y ago
    It's possible to be technically correct but still be an asshole. Making use of the ability to employ considerable resources to reduce your corporation's tax burden in ways that organisations without those resources cannot is absolutely a violation of the social contract surrounding taxation, which typically follows the convention that those who profit the most from society should return the most. As a result it's no longer shrewd but immoral.
    - t-writescode 6y ago
      Even if the tax structure they're using enables them to hire more employees so those employees can survive more comfortably?
      - Jochim 6y ago
        That assumes that they need more employees in the first place. Even then I don't believe companies hiring more employees is necessarily a good thing, unless you believe in work for work's sake. Robust corporate taxation pays for decent social safety nets/UBI, such that people aren't at the mercy of the whims of whatever mega-corp they're dependent upon for survival. This has the added benefit of naturally improving wages and worker's rights, while allowing for the removal of a minimum wage. It also has the added benefit of decoupling artistic expression from corporate funding.
        t-writescode 6y ago
        Do you think your arguments against the tax code and increased employment presuppose a more perfect world than we have and increased employment could be considered an intermediate step along the way? That is, right now, we don't have UBI and the safety net, at least in the US, is very weak, so employment and decreased unemployment _are_ necessary for the time being and the ideal state described here is many more steps away than the current status quo.
saalweachter 6y ago
> Also, why not consider that by using the complex web of tax laws to their advantage allows them to sell products at a lower price. Don't business taxes (whether US taxes on profits or European VAT) ignore the costs of goods?

lotsofpulp 6y ago

Which degree should we start judging at? When people deduct taxes for donations to universities to increase the odds of their child being accepted? When people deduct taxes for charity to their church/temple/organization/other tribe in order to direct resources in a way that might benefit them more directly versus the nation as a whole? It's either legal or it's not. If you want the "abuse" to stop, then elect the legislators that will make the loopholes illegal.

ashtonkem 6y ago
You seem to be making the argument that if it’s legal, it’s not immoral. I reject this argument completely. By necessity the law does not (and cannot) cover every single aspect of human behavior. Just because what IKEA is doing is legal does not make it right. Nor is it inappropriate for a private citizen to condemn behavior they disapprove of, whether or not it’s legal. As far as where the ethical line is, that is a very complicated subject not conducive to generic discussion. But I am extremely certain that “we configured our multi-billion dollar international furniture business as a non-profit” is certainly well on the wrong side of the line. We can discuss other scenarios in their appropriate context, but the existence of other grey areas does not excuse the unethical behavior of IKEA here. I do wish legislators would get their <explicative deleted> together and fix the tax code so that IKEA will pay their fair share, but condemning them for their behavior is a necessary prerequisite to that change actually happening. One can’t chastise other citizens for complaining about unethical behavior and suggest that instead someone else should change the law, that makes literally no sense. I have no direct capability to change the law, and it’s incoherent of you to tell me to stop complaining about it until the law is changed.
- lotsofpulp 6y ago
  >You seem to be making the argument that if it’s legal, it’s not immoral. Yes, I would say that legally reducing one's taxes is not immoral. >By necessity the law does not (and cannot) cover every single aspect of human behavior. Yes, but in the case of tax law, the complications are created specifically to allow loopholes, and/or to allow the government to not have to transparently state costs. I would posit that any goal of tax deductions is more transparently accomplished by the government spending the cash outright and having to account for it. >Just because what IKEA is doing is legal does not make it right. In the context of tax law, I think it's all fair game. If the people want to close loopholes, then close them for everyone. As a business, I'm going to do whatever I need to maintain a competitive advantage. As a voter, I'm going to support legislation that levies taxes according to the quality of life I think people should have in society.

pvarangot 6y ago

There's simply no other furniture retailer the size of IKEA, by far. So we actually don't have anyone else to compare to. Someone defending IKEA could argue that if companies like Walmart of Target, which I think are the closest competitors to IKEA, were in the same position they would do even more nefarious tax evasion. It's a "lesser evil" argument but it does ring kind of true.