It is also a great tax evasion schema since the ownership is a charity (that donates money to "product design"), allowing IKEA to escape vast sums of taxation globally.
Or let's call a spade a spade, and let's call tax evasion tax evasion.
This is partly a resource problem. If you can pay advisors to create an impenetrable network of shell companies through which money disappears five levels down, you can pay lawyers to defend you if something goes wrong.
The authorities are far more likely to go after - and jail - sole traders, smaller SMEs and consultants for five or six figure transgressions than near-billionaires with six, seven, or eight figure creative accounting.
Thus you can have large sums involved, but may find out that law wasn't broken, so there is no conviction. This is as it should be.
You know who can stop avoidance? Politicians. They need to take responsibility. Feel free to shame multinationals or HNWIs for not paying taxes, but at the end of the day avoidance is only possible because politicians (or their advisors) make shoddy laws that aren't well thought out.
Tax avoidance is essentially nothing more than understanding the law and framework you are operating in well, and finding a way to place income outside of the application of the law. So make better laws -- that's the only thing that can stop (excessive) tax avoidance.
As long as politicians and don't put in a significant effort to close loopholes, I don't have any issue with tax avoidance.
Expecting profit-motivated companies to voluntarily choose to pay more tax than they have to is fundamentally doomed to failure. One of the powers of the free market is to encourage the elimination of inefficiency and waste—not that it's perfect at that—and we can't expect to both have our cake and eat it, in that sense.
I strongly agree that many companies should be contributing more to the state for the services that they use. But the way to do that is though robust and clear taxation frameworks, not some kind of general social pressure to pay an arbitrary, 'acceptable' amount of tax.
The economic and political rhetoric around "freedom", "taxation is bad because government is bad", and so on is a propaganda exercise. It isn't something that appeared spontaneously as a self-evident social truth.
The more time I spend finding out about the history of political though in the US, the more I realise that the dominant narrative is the language and thinking of the hyper-rich, generated and maintained entirely for their benefit.
Nothing in nature forces countries to be ethically consistent.
The preservation of these loopholes is not accidental -- they are deliberately left there for avoiders to take advantage of in exchange for political donations. The two groups work together in a corrupt and unethical partnership, while the populace can only watch from the sidelines fuming.
I see it as a win-win-win for workers (the developers who write the code), their employers (who invest in open source as a superior product), and the software industry and society at large (through increased productivity and a better model for collaboration).
I'm still doing quite a bit and making the best use of my talents: way more than enough effort to call the facile critique of "start a political party".
And by the way, I feel plenty satisfied that contributing to open source software in just about any capacity helps to ameliorate the problem of economic inequality, by empowering individual creators without harming capital -- and inequality is what's at the root of this tax issue.
But it's not legal. At least in theory, in most of continental european law the spirit of the law stands above the letter of the law, and just because you found a technicality does not make it legal.
Elections lie on a spectrum from fair to sham, and the greater the influence of the powerful, the more it resembles a sham.
What he ran away from was wealth taxation that showed intention of becoming confiscatory, meaning his company would be taken from his control by the government.
Evasion is solved by rigorously enforcing existing tax frameworks. Avoidance is solved by closing loopholes. They're two different problems—although they share some things in common—and they require two different solutions.
Even those of us who are sure that after cutting down all the laws, we could not stand in the winds that would blow then (to paraphrase Bolt)... can feel appalled at such laws, their originators, facilitators, and apologists.
Agreed. The problem, and the source of the frustration, is that your average poster on hacker news (or average human being on earth) has 0% influence on either of the solutions. It is the mega rich who hold all the power, who have the resources, energy, and clout to play these games.
It doesn't really matter how you distinguish evasion and avoidance, both are driven by the same motivations, and where the line separating the two stands in any given jurisdiction is defined less by the qualities of the actual actions, and more by how much the rich have managed to encode into law vs. how safe they feel openly breaking it.
Guaranteed effect or your money back.
I think it's a nice, cromulent word that we can all agree on.
Messing these two different concepts up helps nobody and just muddles the two issues further. Avoidance is a problem that must be tackled on a global scale; but first, we have to be honest about what it is.
It's a mere technicality. Important in a court of law - sure.
Not important when discussing ethical implication of not paying taxes in the context of HN.
Legal definitions are not important for discussing ethical implications?
This is a wildly unsubstantiated claim that you’re positing without any compelling argument behind it. What you’re saying is implicitly tantamount to saying a discussion of legislation is irrelevant in a discussion of ethics. Doing that literally dismisses entire schools of ethical philosophy.
You don’t have to agree with legal definitions a priori, just like you don’t need to agree with particular ethical arguments. But you absolutely need to consider them for a well reasoned discussion about ethics. The legal definitions are there precisely because of past ethical discussions - legislative arguments are, categorically, ethical arguments. In fact, you could define legislation as the implementation of an ethical specification.
So you’re not disagreeing then. We’re saying the same thing: legal definitions are relevant and should be included in discussion, but they do not have to be agreed with because are not intrinsically correct.
I didn’t ask the parent comment for agreement with legislation, I asked for acknowledgement in an ethical discussion because it’s relevant.
What exactly are you achieving if you don’t rigorously define your terms and agree upon them? You make it sound like insisting on that is just a method of sophistry, but it’s the foundation of human communication. We cannot possibly talk about anything in a productive way if we’re not being precise in our terminology. Nuance and context have a meaningful impact on our conclusions, and legal definitions aren’t pointless. You can debate the merits of those definitions, but to hand wave them away because the conversation is “informal” is silly.
It is objectively false and unproductive to conflate tax avoidance and tax evasion. If you have a disagreement about the ethics of tax avoidance and believe it is meaningfully similar to tax evasion, that argument can certainly be made. But it is a legitimate point that tax avoidance is a separate thing from tax evasion. If you want to challenge that, you need to essentially debate the axiomatic legal foundations - i.e. do you find the relevant legislation unethical? Do you think tax avoidance is a net negative even if it’s illegal? Etc. The legal context isn’t pedantry, it’s intrinsically relevant to the topic.
On the other hand, what you’re doing is dismissing an attempt at precision, which actually bypasses attempts to have these very legitimate debates. No conversation has been hijacked here. Moreover, even if you call this an “informal conversation”, it will persuade people to change their opinions or reinforce them in a meaningful way. You cannot avoid that reality by temporarily surrendering rigor and selectively choosing what’s relevant to the topic.
If you disagree with the legal distinction between tax avoidance and tax evasion, make a compelling argument for it. But don’t dismiss a well established legal distinction without a commensurately compelling reason to do so.
Why? Because there the pedantry is at least topical. Here, it is arguing language in order to grind an axe on a side issue almost completely unrelated to the Ikea founder.
In point of fact, it’s pedantic to dismiss an argument from legality on the grounds that it’s “legal” and not “ethical”, because legalislation (and more importantly the reasoning behind it) is a subset of ethics. A carefully considered discussion will include the existing literature that has come out of previously considered discussion; therefore it is fully reasonable to consider legal arguments in a discussion of ethics.
To reiterate, you need not agree with legal arguments, but to call them pedantic or irrelevant is simply incorrect. They’re exceptionally topical.
What you describe is not the only view of language. If you are not being pedantic, you might consider the Wittgenstien's view on how language is like a game.
So there are different classes of language games, and one can argue that legal one is not the one being played out in a internet forumn. Legalism is language of courts, derives its meaning from its use to resolve disputes. So deriving the meaning of ethics as used in normal conversation language game from legal grounds is being pedantic.
They also fund programs by Save the Children: http://www.savethechildren.org/site/c.8rKLIXMGIpI4E/b.827580...
What you're proposing basically amounts to the welfare state and its needs owning the Swedish nation, rather than the other way around.
How would you feel if Apple would keep portraying itself as an US company after moving its HQ to China? :)
Registration is a matter of paperwork. Incorporation is a legal fiction. IKEA is a Swedish company for all intents and purposes, except tax liability. Taxation isn't the essence of Swedishness.
If Apple did some legal magic and moved its company registration to Sweden (and paid any and all due taxes in Sweden), it still wouldn't make the iPhone a Swedish product (to the extend the iPhone claims a nationality, which is doesn't really, so it's not a great comparison).
It's kind of crazy given that IKEA in reality is a Dutch charity for tax reasons. At this point in time, IKEA is about as Swedish as Media Markt.
At the cost of not being able to access it at all anymore!