5 ms·

'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 us

'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.
        lotsofpulp 6y ago
        Whatever the history is, it's been 40+ years since it started, and legislators have subsequently gone through a lot of effort to create a two tier system (IRAs vs 401k) which heavily favors employees of large businesses than can afford to pay high wages. When something so blatantly tilted towards the rich, white collar world exists, and can so easily be fixed (by simply matching the terms of the IRA to the 401k), and has not been fixed for over 4 decades, I then take it to be intentional.
    - omgwtfbyobbq 6y ago
      In the same way that a 401k is set up for a specific purpose, IKEA's foundation was also set up for a very specific purpose. If anything, the purpose was criticized as being overly narrow, and they recently updated it to be more broad. Whether a firm can do something similar depends on the specifics. I'm not sure how large IKEA was when they set up their corporate structure in the early 80s, but I doubt they were as large as they are today. https://web.archive.org/web/20201112042116if_/https://www.economist.com/business/2006/05/11/flat-pack-accounting https://web.archive.org/web/20201112042116if_/https://www.ec... I'm not trying to equate personal and corporate taxation though. If IKEA wants to funnel a large portion of their profits into a foundation to control themselves rather than paying taxes to the government instead, I don't see how that is tax avoidance. Many other foundations around the world are set up so the controlling interests of companies can choose how to disperse money instead paying taxes and letting the government choose how to disperse it. Not that there's anything wrong with that either, but having a corporation designed to minimize taxes by funneling profits into a foundation doesn't scream tax avoidance to me. With that said, there could be other aspects of their corporate structure that I'm not aware of, but like I said, if other companies can also implement the same structure, even if it's across national boundaries, I don't see it as being particularly unethical. Although if someone believed for instance that companies should always repatriate all profits, then I could see how they would think this is unethical, so as usual YMMV. Edit - To put it another way, there don't seem to be laws restricting investment firms from buying controlling interests in companies to manipulate asset prices/consumer behavior, which to me is far more detrimental than someone who may be pathologically frugal deciding they want to minimize taxes by setting up a complicated corporate structure with a foundation. https://en.wikipedia.org/wiki/Ingvar_Kamprad#Personal_life https://en.wikipedia.org/wiki/Ingvar_Kamprad#Personal_life
- 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?

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.
      - lotsofpulp 6y ago
        Whatever the history is, it's been 40+ years since it started, and legislators have subsequently gone through a lot of effort to create a two tier system (IRAs vs 401k) which heavily favors employees of large businesses than can afford to pay high wages. When something so blatantly tilted towards the rich, white collar world exists, and can so easily be fixed (by simply matching the terms of the IRA to the 401k), and has not been fixed for over 4 decades, I then take it to be intentional.
  - omgwtfbyobbq 6y ago
    In the same way that a 401k is set up for a specific purpose, IKEA's foundation was also set up for a very specific purpose. If anything, the purpose was criticized as being overly narrow, and they recently updated it to be more broad. Whether a firm can do something similar depends on the specifics. I'm not sure how large IKEA was when they set up their corporate structure in the early 80s, but I doubt they were as large as they are today. https://web.archive.org/web/20201112042116if_/https://www.economist.com/business/2006/05/11/flat-pack-accounting https://web.archive.org/web/20201112042116if_/https://www.ec... I'm not trying to equate personal and corporate taxation though. If IKEA wants to funnel a large portion of their profits into a foundation to control themselves rather than paying taxes to the government instead, I don't see how that is tax avoidance. Many other foundations around the world are set up so the controlling interests of companies can choose how to disperse money instead paying taxes and letting the government choose how to disperse it. Not that there's anything wrong with that either, but having a corporation designed to minimize taxes by funneling profits into a foundation doesn't scream tax avoidance to me. With that said, there could be other aspects of their corporate structure that I'm not aware of, but like I said, if other companies can also implement the same structure, even if it's across national boundaries, I don't see it as being particularly unethical. Although if someone believed for instance that companies should always repatriate all profits, then I could see how they would think this is unethical, so as usual YMMV. Edit - To put it another way, there don't seem to be laws restricting investment firms from buying controlling interests in companies to manipulate asset prices/consumer behavior, which to me is far more detrimental than someone who may be pathologically frugal deciding they want to minimize taxes by setting up a complicated corporate structure with a foundation. https://en.wikipedia.org/wiki/Ingvar_Kamprad#Personal_life https://en.wikipedia.org/wiki/Ingvar_Kamprad#Personal_life
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?