The development of no small part of English common law was the result of a multi-century cat and mouse game between wealthy landowners that wanted to keep their property in the family "forever" and everyone else that didn't want to have the dead hand of the past control substantial portions of the country's productive assets. Two groups in particular that didn't like to see assets locked away were dissolute heirs and their creditors.
Patent attorney? Me too. Have you read the malpractice case in California that basically says that you can't be found to have practiced malpractice for violating the RAP because its too convoluted?
From that article: "It is notoriously difficult to properly apply: in 1961, the Supreme Court of California ruled that it was not legal malpractice for an attorney to draft a will that inadvertently violated the rule." (Emph added)
Presumably California would look less kindly on someone saying to their lawyer, "I want to lock up this money forever", and the lawyer in response saying, "Yes, I will draft your will so that the money will only ever be spent in the manner you command."
In the current political climate I wonder if fee tail could be brought back. The predominate opinion among economists and, especially, legal scholars on the far right seems to be in favor of removing any and all limitations on the enforceability of contracts and trusts, and I could see the far right in many states embrace a return of fee tail as it would be easy sell to their political base as a way to preserve property in the family.
> In the current political climate I wonder if fee tail could be brought back
Unwinding capitalism as overly progressive and retreating to feudalism seems entirely in line with the politics of the present US ruling faction, and bringing back fee tail would be a natural step toward that.
Land just isn't as important as it used to be. So I doubt you'd see a strong movement to bring back fee tail. On the other hand, IIRC from law school, several states have arleady abolished the rule against perpetutities and allow for perpetual trusts, so long as the trustees have the freedom to invest the trust res as they see fit. In other words, the trust can't be required to hold on to a specific piece of real property, but it can keep principal out of the hands of heirs and only distribute income essentially forever.
> The foundation owns itself, so no Kamprad family members hold shares.
Late stage capitalism...
Anyway, I don't really get why the article claims he didn't care about money. It's known for a while that IKEA avoids taxes in many dodgy ways. If he really didn't care, the connected companies could pay a reasonable amount.
He didn't really care about money personally, or at least not the material things money can buy. At least that's the image he worked very hard to portray by driving an old Volvo, living in a modest house and wearing clothes bought in a second hand store etc. He obviously cared a lot about his companies making as much money as possible. Although if you asked him he'd probably say that all that tax avoidance was just him being frugal.
"It was not exactly so, as reporters found. His home was a villa overlooking Lake Geneva, and he had an estate in Sweden and vineyards in Provence. He drove a Porsche as well as the Volvo. His cut-rate flights, hotels and meals were taken in part as an exemplar to his executives, who were expected to follow suit, to regard employment by Ikea as a life’s commitment — and to write on both sides of a piece of paper."https://www.nytimes.com/2018/01/28/obituaries/ingvar-kamprad...
He owned several luxury houses and most certanly never bought 2nd hand clothes even if he wore simple clothes. So it was a carefully crafted image, not what he actually did.
It was obviously a well crafted image, but hardly one invented out of whole cloth. For example non of the three homes he owned[0] would classify as luxury by any reasonable rich person standard. His 'luxury' house in Switzerland was probably not even among 10 most expensive houses in town and was significantly smaller than most billionaires garages. His house in Sweden is in the middle of nowhere, the sort of place where 'no one' wants to live and you can pick up large swaths of land for very little money.
edit: here is a picture of "luxury villa" in Switzerland: https://w.cdn-expressen.se/images/7d/e2/7de2bbfb59044fe6bfc3... Don't get me wrong it's a nice place and something for a reasonably successful doctor or lawyer to aspire to, but hardly screams "one of the 20 richest people in the world".
[0] The vineyard was technically owned the Ikea Foundation and not by him personally, and since the wine they produced there was sold at the restaurants at his stores the whole thing was probably considered a business expense for tax purposes. Because that was how he rolled
Ok. But when why not donate the tax savings to an org that can use it
Technically the IKEA Foundation (www.ikeafoundation.org) is that charitable organisation. And technically they do donate a bunch of money each year to various causes. Of course they're not the most transparent of organizations so it's hard to really judge their philanthropic efforts.
Maybe "Money doesn't motivate me" would be more accurate?
At the risk of trying to psychoanalyses a man know very little about,I'd say that "personal wealth doesn't motivate me" is probably the most correct statement. He obviously cared very much about his businesses and making them as successful as possible, and as such probably cared deeply about money to the extent that they're the 'points' used to judge who's winning that game.
If he didn't care about money personally, why did he move to Switzerland from Sweden to avoid paying taxes? There is also that weird non-profit cooperative that IKEA masquerades as to avoid paying corporate taxes as well. Whatever can be said about the founder of IKEA, he really knew how to avoid taxes!
Because there is no point in being frugal if you have to pay significant corporate tax. And it helped expand "the empire" he was building, because he could reinvest everything.
He most likely hated wasting money, whether that was on excessive expenses or taxes -- it makes no difference. The money is gone either way.
I have a friend whose grandfather built quite a large retail business (in the billions). He said his grandfather was the same, including the tax avoidance. Grew up poor, made it, and hated wasting money.
> Because there is no point in being frugal if you have to pay significant corporate tax. And it helped expand "the empire" he was building, because he could reinvest everything.
Only profits are taxed, not sales. So if you "reinvest everything" you are not going to pay taxes.
You can hire more people, buy other companies, rent more equipment, etc. The net result is that the company grows but has no profits. It doesn't work if it buys real-estate, for example, as that increases the company value and the owner then needs to pay for the increase of the value of the company. But then it's on the share value increase, and not in profits.
High taxes can incentive grow as spending money to grow it's less costly than to capitalize profits. That's why lowering taxes is seen as an opportunity to withdraw money and reduce investment.
Sure, but you might not want to reinvest everything today, or within the same tax year, or perhaps you can't tax depreciate an entire property in the same year, etc. Acquisitions of stock (i.e. when acquiring competitors) can't also generally be offset against corporate tax.
There will always be some 'leakage' and taxes to be paid. Non-profits are generally exempt from all corporate taxes. If you don't care about putting profits in your pocket, they tend to be very tax efficient.
In the case of Ikea, a royalty on all sales (for use of the brand name) is paid to a low taxed for-profit entity. That's how he made his money. The larger the empire, the more royalties he gets, so the structure does make some sense. Not as perfect as running a pure for-profit entity, but probably one of the most tax efficient.
But you said there's no point in being frugal if you are paying significant corporate tax. If you have a heavy tax burden surely it is important to allocate your remaining resources frugally?
I'm saying option a is better than option c) spend wastefully because you pay high taxes.
Your comment seemed to advocate for this third option.
I now understand your meaning to be "paying high taxes is not frugal" which I disagree with for other reasons. Specifically paying unnecessary taxes would not be frugal but a company can still be frugal and pay high tax rates. To put it another way I do not believe tax avoidance is a frugal necessity.
Perhaps I phrased it wrong -- I believe, if you are a person who is extremely frugal, you will also automatically want to reduce your tax liability. Because at the end of the day the result is the same: an expense means money leaves the business, taxes mean that money leaves the business.
It's not necessary.. but probably a personally trait of frugal people. You reduce expenses.
You're absolutely right however that high taxes tend to incentivise reinvestment (so you can tax deduct). But too high taxes also deter entrepreneurship to some extent, because past a certain point a lot of people will feel they're working more for the state than for themselves.
Yes, of course. But only if the law says you have to; that's what legal avoidance is all about.
If you legally find a way to reduce your liability to zero (i.e. like Kamprad did), then you're also being frugal? This obviously might not be entirely ethical, but it's extremely frugal. :)
It's not wasting money - his business benefited from having an educated, healthy, safe workforce; from having roads to deliver products and customers to stores; and from a justice system to enforce laws and protect all of that property. He was just greedy and didn't want to pay his fair share.
That was his image, he and his family owns a company in the tax haven that is the Netherland Antilles, which on a yearly basis receives 3% of the total turnover of IKEA in a brand name licensing deal.
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'.
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.
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.
One of those loopholes that small mid to low income citizens can do is by majority elected revolutions and majority voted wealth reallocation. Should we scorn them for doing that, and on what moral principle is that different from a company exploiting loopholes or using political lobbying to disregard majority opinion in order to create laws with loopholes in them.
Scorn or moral objections is not the same as legal. If 51% voted to take the land and property of the 1%, then that is a democratic decision and the publicly published law. It would also be overwhelming scorned by those effected. Should we just tell them that they too would redistribute the wealth if they could and its stupid for anyone to not take wealth if they could.
Please let's get technical here. Apply to the other comments to the parent comment.
Tax avoidance is an illegal means of not paying the actual tax required.
What you and the others who have replied to your comment mean is "tax minimisation", which is legal and uses the specified tax code to minimise your tax burden.
What is often done in discussions about this subject is classifying legal tax minimisation processes as tax avoidance.
Tax minimisation is perfectly fine and quite moral. Tax avoidance is not fine and is often immoral, though not necessarily.
There is a second thing at play here though. As I have friends who have worked in one national taxation organisation, they have explained that the way the system works is that the taxing organisation has internal descriptions of what they will allow as legitimate deductions which are different to what the legislation might read. If you use the correct descriptions and terminology, they will allow your claim through with no challenge. But, if you do not use the correct description or terminology then they will challenge said deduction. Such descriptions are not publicly available.
That is why good tax accountants get those obtuse deductions for their clients.
The tax law is written so that every citizen (including corporate) is only required to pay the minimum amount required and not anything above that.
> Tax avoidance is an illegal means of not paying the actual tax required
It seems curious that you'd start by defining terms and then define those terms incorrectly.
tax a·void·ance
taks əˈvoidns
noun
the arrangement of one's financial affairs to minimize tax
liability within the law.
In short, what you're referring to as minimisation is avoidance. For what it's worth, I've been using them interchangeably up to this point, and I agree that it's innocuous, harmless, etc.
The illegal act you're referring to is tax evasion.
> the taxing organisation has internal descriptions of what they will allow as legitimate deductions which are different to what the legislation might read
In America, the IRS is bound to the same laws as the citizenry, and while there may be some allowed discretion in interpretation, re-interpreting the law on their own is in fact illegal.
Tax avoidance is the avoidance of the required tax (an alternative name is tax evasion), tax minimisation is paying one's required tax and no more.
From the perspective of tax collectors, avoidance is evasion and not minimisation. Politicians also use the term "tax avoidance" as a synonym for "tax evasion" when it is useful to them.
Having friends who worked at various stages for various kinds of bureaucracies (including tax collection), they have spoken of the distinct terminology used and why it is used.
It is not a matter of re-interpreting the "tax law" but creating the appropriate internal definitions as to what that "tax law" means. The problem that people face is that legal definitions quite often do not match the general populous understanding of the words used.
We can always argue over whether or not "tax avoidance" is the same as "tax evasion" or "tax minimisation". The reality is that each of these terms has a definitive meaning dependent on who is using the term. Taxation collection organisations will have one set of meanings, politicians will have another, the general population will have another.
The only meanings that are relevant are what the taxation collection organisations assign to those terms in their internal working processes. I am using the definitions of those terms as shared to me by my friends in taxation.
One of the reasons for using tax accountants these days is that many years ago, I was audited by the relevant tax authority. The upshot was that they disallowed the claim in question and in my last conversation with the auditor, he made the comment that the deduction was allowable but he wasn't going to tell me how to claim it. I have used accountants since then. I let them deal with the complexity of the taxation law. A good accountant is worth the cost just to avoid having to deal with the "insanity" of current taxation regimes.
I don't have a problem with taxation per se, only with the insane level of complexity that has built up in modern times. When tax law goes from say 80 pages at the start to 30,000 + pages today, one has to ask why? YMMV.
Lastly, if in America, the IRS is bound by those same laws as the citizenry, why are the so many documented cases of the IRS "draining" the bank accounts of so many little people when nothing illegal has been done? The IRS has interpreted the law by their own internal definitions.
> Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law.
> Tax avoidance is the use of legal methods to modify an individual's financial situation to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion, which uses illegal methods, such as underreporting income to avoid paying taxes.
> The process whereby an individual plans his or her finances so as to apply all exemptions and deductions provided by tax laws to reduce taxable income.
> Through tax avoidance, an individual takes advantage of all legal opportunities to minimize his or her state or federal Income Tax, gift tax, or estate tax. An individual may, for example, avoid federal income tax by investing a large sum of money in municipal bonds, since the interest on such bonds is not considered taxable income on which federal tax is due. Interest on the same amount of money placed in a savings account must be included as taxable income.
> From the perspective of tax collectors, avoidance is evasion and not minimisation.
This is misleading. Either may trigger an audit if the internally expected discrepancy is greater than the actual discrepancy, but an audit isn't criminal, and it takes an assertion of fraud (a violation of the law, which does not fall within legal avoidance strategies) to go from audit to criminality.
> Politicians also use the term "tax avoidance" as a synonym for "tax evasion" when it is useful to them.
Possibly. Politicians do all sorts of stupid shit. That has zero bearing on the definition of words.
> The problem that people face is that legal definitions quite often do not match the general populous understanding of the words used.
Right, which is why tax agencies interpret the law into tax code that is distributed to the populace* as clear and transparent. In the event that there's a failure at reconciliation between legislative intent on a tax policy and the interpreted code, that can be changed legislatively, clarified during reconciliation, or fixed through a variety of other means. The IRS is not authorized to re-interpret tax law to mean things it doesn't say, and while there's a certain amount of interpretive leeway, as a citizen, you can sue where you disagree.
> We can always argue over whether or not "tax avoidance" is the same as "tax evasion" or "tax minimisation".
We can, but since there are clear lexical, legal and tax definitions for each, it seems a stupid hill to die on. If people insist on using the wrong words, that can't be helped, but that doesn't mean that the right words don't exist.
> I am using the definitions of those terms as shared to me by my friends in taxation.
Not that it should be considered canon, but I have friends that work at the IRS, the SEC, and at FINCEN. I reached out to them, and they all think that your friends are wrong. /shrug.
It's probably worth clarifying that when I refer to agencies here, I'm referring specifically to American agencies. I don't have any clue on how other countries internally represent their laws, and I make no assertions as to how they operate. I have no idea.
> Lastly, if in America, the IRS is bound by those same laws as the citizenry, why are the so many documented cases of the IRS "draining" the bank accounts of so many little people when nothing illegal has been done? The IRS has interpreted the law by their own internal definitions.
Well, they can't drain your account, but they can freeze your funds. As to the 'why', it's because there are laws that expressly authorize them to do so. The IRS has express legal authority to issue a bank levy to freeze accounts in the event of certain activities or suspicion of certain activities. Note that 'having legal authority' to do something does not connote to 'having extralegal authority' to do something. They are bound by the same laws that you and I are, and those laws authorize them to do something. While speaking practically, they might be able to freeze accounts for no reason at all, but they are breaking the law in doing so because they do not have legal authority to freeze accounts for funsies.
As far as any tax collection body is concerned, tax avoidance bad (acts as if it is the same as tax evasion), tax minimisation okay.
As far as IRS and draining of accounts is concerned, tell that to the poor people who have had their money confiscated from their accounts. Enough records of this occurring for you to track down. Little people usually don't have the resources to engage in the legal battles to regain their funds.
As far as your friends are concerned, their MMV.
Our differences are there and so be it. There are more important matters occurring at this time than this kind of discussion.
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.
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.
One doubts those narrators would approve of the little people doing what it would actually take to rein in big business. In any case, it seems impossible to be both uninformed and complicit. (If you were just being really subtle and meant "uniformed", then yes one would agree that uniformed people, little or big, are more likely to be complicit.)
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.
Complete nonsense. Finding a loophole in the tax code is no different to finding a flaw in some computer code that gives you some access you were never intended to have. Should we all hire professional hackers too?
Except that the laws are the rules, the rules are publicly published, and everyone has access to them.
If McDonald's is selling a 10 piece McNuggets for $1.49, and a 20 piece for $4.99, then buying 2 x 10 piece McNuggets for $2.98 is a loophole around paying $4.99. If you find it immoral, so be it, but it doesn't change that you're paying more for McNuggets than McDonald's requires you to pay.
I don't find that to be an apt analogy. Tax avoidance is more like abusing coupons. Someone else is effectively paying your share, but the company can't shut it down because customer would complain or it could hurt the business overall. Eventually the business is forced to raise prices and everyone deal with coupons just to get a decent deal.
I feel like the phrase "coupon abuse" is madeup crap. A Business gives discounts in order to (hopefully) make more money, then try to ensure that we all see people who actually use those discounts as "abusers".
Don't fall for it.
It's not that complicated. If you are a business, don't sell stuff at a loss. If you want to sell stuff at a loss to drive traffic to your store, you're going to take a loss. Don't blame your customers.
Because coupons might be useful to sell overstock or introduce new products. And even if you wanted to you would either have to convince all your customers to change their habits or convince the other businesses not to also not use them. It is like with credit card fees in the US.
Because they are political tools. Like how "getting rid of pollution" would involve rethinking our civilization, not just creating some dumpster fires.
Most people don't buy IBC totes of dish soap to save a few bucks on the unit price because it's impractical, never-mind that they don't have the equipment to reasonably deal with liquids in that volume.
If you're not that rich then it doesn't make sense to go all out optimizing your taxes because the savings aren't big enough and the costs of doing so are high enough to make the net result a savings.
Not being rich enough to have access to certain tax avoiding structures is like complaining you not being able to get the savings of buying a ton of dish soap because you don't have a fork lift.
It's a thing I've seen people do. Visiting a neighboring city to take advantage of their tax holiday for back to school shopping, for example, or buying a car from a neighboring state to avoid in-state registration.
People avoid taxes all the time, it's just that 5% savings on an average income doesn't save millions of dollars and cause Twitter to hate them.
Personally, I take the mortgage interest deduction, claim my real dependents, and put as much into my 401K as is legally allowed. Those are all tax avoidance strategies that people routinely engage in.
> Finding a loophole in the tax code is no different to finding a flaw in some computer code that gives you some access you were never intended to have.
But the former is not illegal while the latter most definitely is (unless it's your own software, etc.).
Loophole has negative connotations. But it really depends on many factors.
A prosperity gospel preacher buying a second LearJet tax free is not the same as a company hiring contractors to stay under 500 employees in order to retain some small-business benefit.
The main connotation of "loophole" is that the result is accidental rather than intended, which is fictitious propaganda.
"It's just crazy, but somehow, accidentally, we passed this big tax law and hedge fund managers don't have to pay taxes! Oh well! I guess we can't ever fix it, either! Crazy accident!"
I'm not really defending the first example, but america has a bit too much "privatize profits, externalize losses" for my taste. These policies do have impacts on the life of the median american.
In most jurisdictions, some loopholes are legal to exploit while others aren't. Loopholes in tax laws are legal to exploit because it is not criminal to try and minimize your taxes. However, gaining unauthorized access to a system is criminal so exploiting loopholes is not legal. I think using loop holes in tax law should count as tax avoidance, but it currently doesn't.
During the Nuremberg trials the Nazis that stood accused actually unsuccessfully tried to exploit what was essentially loop holes in international law.
Are you kidding me? Loopholes like that don't exist. The tax code starts from the assumption that you owe them money, but for very specific reasons allows you to deduct or credit from that amount owed. They simply do not naively put in deductions that shouldn't be there. The idea that "loopholes" are unintentional vulnerabilities is completely disconnected from reality.
You seem to forget who got those legislators elected. Of course they intended it.
The real problem is that the corporate tax shouldn't exist. It's too easy to fuck with and manipulate a profit tax by being creative with what counts as revenue and what counts as expense. And tax incidence studies have repeatedly shown that the burden of corporate taxes fall disproportionately on labor, not capital. The better idea would be to eliminate the corporate tax entirely, taking the world's entire corporate tax avoidance scheme with it, and instead tax personal income, dividends, and capital gains at higher rates. It would actually be more progressive and far less avoidable, and mountains less complex.
You're trying to make it sound like an overly complicated and not that likely situation. It's quite simple: money is free speech and legislators are listening. It's absolutely, 100% the case that tax laws are written to favor large businesses.
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.
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.
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.
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.
> 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.
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.
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.
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.
Sure, part of the taxes goes to crap. But a part is spent for things that your local community will benefit from. Your accountant may spend some of the money locally which is great, (mostly necessities - lots will be spent with global companies/online) but it's unlikely any of it would make it to the larger projects which require gov-level coordination.
Giving that money to your accountant on one hand side you avoid funding the military, on the other you avoid funding things like NOAA, NAA, VA, food safety, and many others.
That $51,000 to the accountant covers payroll for at least a couple accountants and a secretary, the taxes and rent those individuals pay personally, the rent the business pays locally, food spent at local restaurants and grocery stores, and the taxes and rent those businesses pay. Rent and food make up anywhere from 30-50% of most modest income household budgets, so it's reasonable to believe 30-50% of that $51,000 stays in the community.
The impact the NOAA, VA, etc has on a local community of 100,000 is, barring a local employment center, 100,000/330,000,000*$51,000. It's not even close how much more of an impact paying your taxes to your local accountant instead of the government would have on where you live.
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.
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.
By fervor I was referring to spending $51k in fees just to avoid $50k in taxes, which is a net loss. If intentional (or intentionally risking such a net loss), that's just spiteful. I don't see how such an ethos could lead to anything but a self-fulfilling prophecy about government.
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.
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.
Sure, thats why he let some of his products be produced by political prisoners in states like the GDR. Please excuse, my sarcasm but this man was not the good guy, even if he wanted to make everyone believe that.
What is the reasonable amount for a company that pays its "owner" no dividend and apparently never will?
This isn't empty rhetoric. Most countries extract tax as x% of turnover plus y% of dividend plus many smaller taxes. Kamprad structured his company to pay its "owner" nothing, which leaves VAT and the smaller taxes, and apparently the structure prevented his heirs from ever getting any financial benefit from Ikea.
Forgoing an income foregoes income tax. I'm asking you whether that's fair. Can someone like Kamprad decide that neither he nor the state should get any financial benefit from Ikea?
The money is now in a foundation, that can re-invest in Ikea or use it for philantropical purposes. It's a nonprofit according to Dutch rules, and they have decided not to tax those.
Eventually the money is spent on something, and will be taxed then.
You cannot make sense of Ingvar Kamprad and IKEA without taking a moment to look at how Scandinavian culture is very different from American culture. First, we should talk about the infamous "Jantelagen":
> The Law of Jante is the description of a pattern of group behaviour towards individuals within Nordic countries that negatively portrays and criticises individual success and achievement as unworthy and inappropriate. (...) Used generally in colloquial speech in the Nordic countries as a sociological term to describe a condescending attitude towards individuality and success, the term refers to a mentality that diminishes individual effort and places all emphasis on the collective, while simultaneously denigrating those who try to stand out as individual achievers.
(It should be noted that these days, Jantelagen as petty as described here does not really apply so much to urban Scandinavian culture, but rural areas can still be very much like this)
Kamprad grew up on a farm in a small village in the 1930s, so we can be fairly certain that this attitude was part of the social values that he grew up with. That is enough to explain why Kamprad did not show off wealth: it would be considered offensive back home.
It is also easy to imagine how one can consider cheapness a positive character trait with this mindset. So I am inclined to believe that Kamprad sincerely did not care about money despite his billions, at least not in the "American" sense.
Jantelagen may also be part of why back in the seventies, Scandinavia was one of the earliest places to embrace principles of Participatory Design: design done together with the people being designed for[0]. Interestingly, in that same period Kamprad wrote "The Testament of a Furniture Dealer"[1]. It does a lot to explain how from the Kamprad/IKEA perspective, being a force of good in the world for the have-nots is not at odds with making tons of money. It reads like political manifesto, except written by someone who can only see the world from the point of view of furniture business. I suppose it kind of is. Just look at the opening paragraphs:
> To create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. We have decided once and for all to side with the many. What is good for our customers is also, in the long run, good for us. This is an objective that carries obligations.
> All nations and societies in both the East and West spend a disproportionate amount of their resources on satisfying a minority of the population. In our line of business, for example, far too many of the fine designs and new ideas are reserved for a small circle of the affluent. That situation has influenced the formulation of our objectives.
> After only a couple of decades, we have achieved good results. A well-known Swedish industrialist-politician has said that IKEA has meant more for the process of democratisation than many political measures put together. We believe, too, that our actions have inspired many of our colleagues to work along the same lines.
> But we have great ambitions. We know that we can be a beneficial influence on practically all markets. We know that in the future we will be able to make a valuable contribution to the process of democratisation outside our own homeland too. We know that larger production runs give us new advantages on our home ground, as well as more markets to spread our risks over. That is why it is our duty to expand.
So how did Kamprad reconcile being successful and making tons of money on the one hand, with social values "that diminish individual effort and places all emphasis on the collective" on the other? Beyond his own frugality, he oriented his ambitions towards producing for the collective. Note that this is not a self-evident business model! Plenty of businesses maximise the perceived value of their products through the idea of exclusivity (supercars and wrist-watches come to mind). When is the last time you saw that attitude applied to an IKEA product? Nobody brags about having a Lack table at home. You know what does fit the IKEA ethos? The Lack Rack, and IKEA hackers[2][3].
As far as I can tell, the internal culture of IKEA reflects this as well. I am originally from the Netherlands, but studied a master in Interaction Design in Malmö University, and have been living in Sweden for five years in total. A number of the people that I studied with ended up working for IKEA. Through them I get the impression that they truly believe in "the cause" of making affordable designs for everyone. You can also see it in IKEA's approach to sustainability[4].
Anyway, the point is that for Kamprad, maximising profits for a successful business, and this business working for the benefit of everyone was not at odds. Keep that in mind and a lot of things about IKEA start making a lot more sense.
As for the IKEA foundation, yeah, it's pretty shady. It would be interesting to look beyond the tax-evasion construction and see how guilty IKEA is of other dubious business practices like externalising costs - that is, whether or not these other practices were as easy to reconcile with a frugal mindset.
As a Norwegian who has lived in the Netherlands for 3 years, I'd say there is many similar traits there. The dutch are known as traders and business men but don't seem particularly concerned with opulence. The attitude towards public display of wealth seems very similar to the Scandinavian view.
The richest man in Norway Olav Thon, has very similar behavior to Kamprad. He drives an old car, doesn't wear particularly fancy clothes. For him it seems more about the game. He loves the game of doing business and winning. It is not what you can do with money personally that matters.
Younger Scandinavian billionaires seem more into spending their money though. The American lifestyle and values are definitely spreading.
I agree, the similarities are striking. For example, we have our own version of the Law of Jante, known as "maaiveldcultuur", or "mowing field culture". It refers to the expression "je moet je kop niet boven het maaiveld uitsteken", which roughly translates to "don't stick out your head above mowing height". In England this is also known as "tall poppy syndrome", and you can probably guess what it means.
> For him it seems more about the game. He loves the game of doing business and winning. It is not what you can do with money personally that matters.
Apparently, one of Kamprad's motto's was that happiness is not reaching the goal, but the journey itself. I suspect that almost all people who are outliers in their field (be that businesspeople, top athletes, anything) share this attitude. Becoming rich is an external motivation. Enjoying "the game" itself is an intrinsic one. When it comes to getting people to move mountains, the latter works much better.
If he believed that his foundation was better suited to appropriate that money than the government, then avoiding taxes is a rational thing to do, and doesn't necessarily mean that their claim about his not caring about the money is false.
Also, if the consumer picks the cheapest item on the store shelf, then companies can’t afford to be philanthropic, as the company most skilled in avoiding taxes will be able to offer the same products cheaper.
Not everybody feels the same that you do about government. Hell, I feel differently about different layers of government. I would probably not seeking to minimize my city or state taxes any more than is convenient, but I'll never give the federal government any more than it takes to keep my head.
He cared about being frugal because that was the Sweden he grew up in. I think this video, where he's buying lunch at an Ikea store in Poland, says a lot: https://www.youtube.com/watch?v=VbUE3O03h_s
(For those who cannot/will not view it, he gets a bit upset when the cashier tries to charge him for the coffee, despite that it should be included in the lunch.)
He didn't care for the lifestyle that money can bring. He was living in a nondescript suburban house near Lausanne and kept his old car for 20 years. Much like Warren Buffet, he was one of these self-made fortunes for whom money is a way to keep tally.
I'll see if I can find the sources but I saw some comments recently that it was a sham, mostly. He did have high expenses.
Edit: Wikipedia says:
> Kamprad owned a villa in Switzerland, a large country estate in Sweden and a vineyard in Provence, France.
I can't guarantee the prices, but those things should be in the multi-million Euro range. Not quite rapper expenses, but definitely not middle class either.
I mean it's really nice house and apparently comes with a very big garden and beautiful view of the lake, but it's hardly opulent. In a different, cheaper, part of the world a house like that would definitely be within the reach of at least someone earning a decent upper middle class salary.
Obviously. My point is that if you just saw a picture of that house your first thought wouldn't be "Wow, I bet one of the richest people in world lives there". Compare to for example this house: http://luxurylaunches.com/wp-content/uploads/2017/02/Le-Belv... which would be expensive basically no matter where in the world you where.
And even with it's perfect location it's apparently still 'only' a ~4 million eur. house. It's not even one of the 10 most expensive houses in town. Hell there are 10 more expensive houses for sale around there on homegate.ch right now.
Well, with lump sum taxation you pay taxes primarily based on the value of your property. So the more 'modest' your house is the less tax you pay. Of course the house, or the land more likely, was still worth $4.5 million USD when he moved.
According to the Economist, the whole structure was created to minimise tax [1]
"What emerges is an outfit that ingeniously exploits the quirks of different jurisdictions to create a charity, dedicated to a somewhat banal cause, that is not only the world's richest foundation, but is at the moment also one of its least generous. The overall set-up of IKEA minimises tax and disclosure, handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover. And if that seems too good to be true, it is: these arrangements are extremely hard to undo. The benefits from all this ingenuity come at the price of a huge constraint on the successors to Ingvar Kamprad, the store's founder (pictured above), to do with IKEA as they see fit."
One have to remember why this was setup in the way it is, to protect the company forever.
In Sweden during the 70-ties 80-ties the Social democrats was pushing a radical socialist agenda ('löntagarfonder') to take over companies by taxing profits and then buying shares with it, all controlled by trade unions.
Result of these policies was that many companies left Sweden to protect itself (of course). IKEA, Tetra Pak and H&M to mention a few.
These socialist policies was one of many breaches of the so called Swedish model that the Social democrats did during the 70-ties 80-ties. This was beginning of the end of the Social democratic era and they started to lose elections one after the other.
These funds was later abolished by the next right wing government.
This sounds so obviously stupid I wonder why nobody stopped and said "You know, we might just make all these companies leave with stuff as ridiculous as this."
A someone who is broadly sympathetic to the idea of labor ownership of the means of production, could I trouble you to explain what's so obvious about the stupidity of this plan?
Taxes on corporate profits are generally seen as reasonable in the abstract, and they're common all over the world. I could see setting an unusually high tax rate being problematic, but that doesn't appear to be what happened.
And it doesn't appear that the state was seizing anything. They were buying up shares off the public market. This doesn't seem more objectionable than any other hostile takeover. If a business owner wants to maintain control of their company then it's trivially easy for them to do so. All they have to do is not explicitly sell it, which is what an IPO is after all.
And I'm having trouble seeing where the creeping socialism concerns come in. The end goal, according to the wikipedia page, was that the companies would be owned and operated by their own labor unions, which isn't an uncommon or inherently controversial corporate governance model. The state appears to have merely been facilitating the transfer.
With perfect hindsight we can of course see that it didn't work out, but I doubt I would have been able to predict that in advance with any confidence. Would this have been fine if the state used a different taxing model? Would it have been okay if the labor unions managed to do it of their own initiative? Is it that broadening ownership of a corporation is inherently objectionable for some reason?
Version that was introduced in 1982 was a water downed version of the original plan, the Social democrats lost an election because of the original plan in 1976 against the popular opposition leader and farmer Thorbjörn Fälldin. Fälldin broke a 40 year long social democratic rule. Fälldin described the plan as DDR style economics with the subsequent removing of personal freedoms.
Original plan was to create funds to would buy up more than the majority of the stock of all major companies in Sweden, all controlled by the labour unions. That would have been de facto socialism. Why? Because the labour unions was married with the political power, the Social democrats. Biggest labour union of them all, LO, controlled Social democrats with funding and forced memberships.
All political power and economic power in one entity would have been very dangerous.
After controlling the major companies in Sweden, they would have of course continued with the non-public companies, because the main goal of Löntagarfonder was to create equal salaries between high profit companies and low profit companies.
Taxing profits in moderation is not breach against democratic principles, but using the companies own money to take ownership over it is.
Right to run your own company was established already in 1864 in Sweden. Löntagarfonder was a direct opposition to that.
Reason why I wrote in moderation, e.g. 100% tax is not moderation and therefore theft.
Intent here was to take control over the ownership of the companies, that would have been same as 100% tax, they where just using a more complicated scheme but the end result would been the same.
It appears the intent was to purchase control over the ownership of the companies at prevailing market rates. As far as I can tell, the existing stock owners were entirely free to refuse the state's purchase offer and maintain control indefinitely, if they so chose. That doesn't sound like a tax at all.
> After controlling the major companies in Sweden, they would have of course continued with the non-public companies, because the main goal of Löntagarfonder was to create equal salaries between high profit companies and low profit companies.
No, that was the "solidarity in wages" policy which was already implemented. It was this policy that made successful companies make excess profits. Those profits were supposed to go to "Löntagarfonderna".
But you buy stock with your own money, the state doesn't.
The state does not have any money, it takes money in taxes we all agreed on to use it in fair way, and that is not to use the power of the state to buy up your livelihood and give that to a party member, that would be unfair.
For a value of "we all agreed" that expands to "was decided via a free and fair democratic process", then it appears that the Swedes did all agree, at least for a time, that this was a fair way for their government to use their tax money.
For any other value of "we all agreed" then it sounds like you're arguing that the vast majority of government expenditures are unjustified. That seems like a much more expansive claim than what you're trying to make.
Why should it be okay for the state to use tax money to purchase a tank or a mile of road but not to purchase a share of stock?
Swedes did not agree, hence losing the following election.
State can of course buy stock. State owned companies can work just fine.
But there is a difference in intent. Intent here was union controlled ownership of all major companies. Creator of idea explicitly quoted Marx.
It think also we got bit sidetracked in this discussion with the word buy that I misused, it was not buying at the stock market, it was "buying" with legislation, exchanging profits for stock.
It is not obviously stupid that labor running the company is a bad thing. I think it is a bad thing in most cases, but I can understand the debate.
What IS stupid is thinking that companies will stick around while their control gets transferred away (from those controlling it). If a company wants to transfer control to its employees, it will do that. If a company doesn't (almost all of them) it will leave. That seems pretty darn obvious to me.
But didn't they already voluntarily transfer control away by issuing stock? Isn't that what stock is?
The CEO doesn't own a publicly traded company, the shareholders do. And if they don't think a sale is a good idea they can just not sell their shares at the offered stock price.
I'm being a bit intentionally naive, but I don't understand who the "they" is that is supposed to have a valid worry about losing control.
> Taxes on corporate profits are generally seen as reasonable in the abstract
actually corporate taxes are a pretty controversial topic among economists. it's not considered to be a particularly efficient tax, and it is unclear who ultimately bears the burden of the tax.
The problem with socialists policies like this is not necessarily the high taxes or the hostile takeover aspect of it.
The issue is the intent.
When socialists start doing stuff like this, it is clear what the long term goal is. The long term goal is to take the means of production from those who have it, though whatever politically palpable means necessary.
Sure, they start off doing a voluntary stock buyout program, but what happens when that program inevitably fails? (perhaps because it takes way to long to takeover a company, or merely that the company owners refuse to sell)
Will the socialists come to the conclusion that their socialist policy didn't work and reverse it?
No. What happens when socialism fails is that the socialists conclude that they didn't go far ENOUGH and then they double down on their mistakes.
In this situation, "doubling down" would be increasing the tax, forcing the owners to sell at a given price, and eventually straight up confiscation of the business.
When people in the government start yelling about how they want to take the means of production, even voluntarily, the proper response is to run away as fast as possible, and take your means of production with you, before they make it illegal to do so.
Looks to me like the Swedish people did, in fact, come to the conclusion their socialist policy didn't work and reversed it via the normal political process. According to the wiki, the Social Democrats retook power three years later and didn't attempt to reintroduce it.
That looks to me like pretty compelling historical evidence against the hypothesis that socialist experiments must necessarily slide down the slippery slope to full-on communism.
If anything the Nordic model and social democracy has failed not because it turned into communism, but because it only takes one government to undermine the system and privatize everything. Sweden today is liberal to the extent that it is regularly featured as an example in The Economist on how to privatize more things in the UK.
I wonder if the guarantee of a hostile takeover is the issue. When companies IPO, they don't expect immediate and systematic attempts of hostile takeover funded by your own money (tax dollars) through the most powerful organization in the area.
I wonder if the companies could have pulled a Zuck and kept full control regardless of ownership.
But you're right, still not so clear why they would run for the exits, unless the tax to do this was prohibitively high.
Corporate tax profits are pretty silly. Profits are an accounting fiction, the residue left over after paying expenses. It's far too easily controlled - add one fully-owned foreign subsidiary for paying IP licensing fees, and your domestic profits evaporate and turn into foreign ones.
The taxes that do make sense are ones that are much more difficult to avoid:
1. Land-value
2. Sale of registered securities
3. Sales tax or VAT
4. Personal income tax
5. Estate tax
It wasn't necessarily stupid. But probably ahead of its time. Today, when it is probably too late to do anything, a lot of people are talking about the risks with automation and need for basic income. And that is essentially what it was, to take the increased profits of automation and put them in a sovereign wealth fund for wider distribution without creating inflation.
If you don't want to lose control of your company, don't issue public stock.
Once you do, and it is bought by someone else, it's not your company anymore. Why does it matter if it was bought by Berkshire-Hathaway, Vanguard, or by the government of Sweeden?
I think you are missing the point. That nationalization was not going to buy control from stock exchange. The point was effectively confiscating it from the owners.
But the social democrat government in Sweden couldn't perform it quickly enough to prevent flight of capital and people, nor quickly enough to consolidate political power to a dictatorship of the proletariat.
So they lost the election and the development was stopped.
I think the idea from the beginning was to issue equity that diluted the current owners, but that was later revised to taxes on profit and payroll. The concept isn't radically different from a pension fund. But of course the purpose was still that workers could take part in the increased profits of companies. The funds weren't allowed to own more than 50% of the voting rights in any company.
There isn't that much in English written about them, but that is actually a good thing since most of it is of good quality.
That's because the point seems ideological, without any backing in reason.
Why is a government buying a majority of a company's shares on the public markets bad? Why is one man, or an investment firm buying a majority of shares of a company any better?
An attack on this is an attack on the concept of public markets.
'Public markets' does a lot of work in this claim. There's an obvious difference between shotgun nationalization, and a hostile stock takeover. It's the difference between armed robbery of a grocery store, and buying a loaf of bread at posted prices.
This seems to be a common reaction when market proponents see their own system used against them. (See also: collective baragining on the side of employees vs collective bargaining on the side of management. For some reason, one is bad, but the other one is just the way things are. Management bargains collectively, but we have to bargain against them independently.)
That's not what's going on here. The government is saying: "give us Xkr" and then turning around and buying shares of the company. That's a two step process, but collapse the steps together and it's the same as the government saying "give us X shares of the company," which is nationalization -- the government taking control (even fractional control) of a company by force.
If nothing else, company officers and the board have an obligation to shareholders, which would would not want to see their shares diluted in that way. So no, it is not surprising that companies decided to relocate to jurisdictions that were not about to nationalize them.
> but collapse the steps together and it's the same as the government saying "give us X shares of the company,"
Great, you've just described taxation.
> which is nationalization -- the government taking control (even fractional control) of a company by force.
How is buying shares on the public market with government money taking control of a company by force? No current shareholder is obligated to sell their shares.
Ah of course, taxation is theft... [1]
> If nothing else, company officers and the board have an obligation to shareholders, which would would not want to see their shares diluted in that way.
Shareholders voluntarily selling their shares to the government does not 'dilute' shares of other shareholders. It doesn't matter if the government's money came from taxing the company, some other company, or individuals.
[1] I'm sorry, but if you want to take advantage of a country's labour force and markets, you are expected to pay taxes. What the government does with that tax money is up to them.
That breaks already at step 1. Government does not have the money; instead it passes a new law to pass control of companies to governing party's proxies (in this case, LO) and expropriate the wealth from shareholders.
Labor running the company? This fails more often than it succeeds. Bread and circuses are the result, then bankruptcy. Indeed obvious without the use of hindsight.
I'm not interested in debating the merits or lack thereof of socialism as a system of government, but the "bread and circuses" thing applied to Roman citizens.
Unless I was misinformed, the overlap between the people in the Roman empire who were citizens and the people in the Roman empire who were the labour force was very, very small.
You get it; pedantry is pointless here. The folks benefitting from a thing will vote themselves money and perks until the place is bankrupt. It takes a different mindset to sign the front of the check, than to sign the back of the check.
Exactly. I tend to criticize plans like this because of their essential similarities to current arrangements, not their differences.
The positive aspect is that it introduces democracy into the system (through control by officeholders), if only for the moment that it takes for power to recentralize (as any autonomy that the business has is lost due to patronage appointments from the central government or larger unions.) Maybe this could be prevented by handing control to the union of the workers in a particular company, or a particular location, rather than large unions that cover entire industries.
"He finds that codetermination laws are negatively associated with productivity, but profit sharing, worker ownership, and worker participation in decision making are all positively associated with productivity."
---http://library.uniteddiversity.coop/Money_and_Economics/Coop...
"The positive effects are found most uniformly with respect to profit sharing and, to a slightly lesser extent, individual capital (share) ownership and participation in decision-making by workers."
---https://www.sciencedirect.com/science/article/pii/0147596787...
Do you have citations to back that up? A quick search turned up a couple of hits (one old, one relatively recent) that both said that Employee owned businesses performed reasonably well. Certainly not conclusive, but a first stab.
Employee-owned is very different from employee-managed.
I recall VW put a single member of labor on their board; it broke the company as other members courted the vote of the uninformed labor rep, giving up perks until labor costs were bankrupting the place.
Companies operating in a competitive environment have to be pretty efficient. Optimizing a company for employee benefits is pretty much at odds with that. I know, they will all be more loyal etc. But that's different from lowering product cost and controlling profit margins. You fail to make payroll even one week, the game's over.
An anecdotal characterization of the members of a board catering to a single representative of labor on that board isn't a model for what employee managed companies look like.
Of course, since labor representation on boards is widespread in Germany, most medium to large German businesses are a good example. I assume the German economy is in tatters.
Forgive me for my ignorance. Lets consider what happens when the workers run the company, not when they have some small input. Experienced management is crucial to correct operation. They folks in the mail room, the factory floor, the loading dock are perhaps not going to have the same motivations as someone trained and charged with deciding the future direction of the business?
If we presuppose educated and trained labor members who are used in management, well then I guess we have that now? In every company everywhere.
In many socialist points of view companies do not provide value, they are viewed as rent seekers. Value = {Raw Resources} + {Labor} + {Tools used by labor}. Companies own the tools, and take a margin of value. If labor owned the tools they could remove that margin. This sounds like the world view used to design that policy.
Yeah, that's Marx's Labor Theory of Value. The problem is that it doesn't account for the value of risk. It's easy to look at companies making money and assume they're extracting value if you ignore all the failed attempts that outnumber the successes 5 to 1. Now, rent-seeking is still a problem and corporations are often guilty of it, but the idea that all profit is rent is ridiculous. Some of it is compensation for risk.
It doesn't sound that obviously stupid to me. It's the stock purchase plan part of a 401k, where instead of the employee/employer-match coming before taxes, it comes from taxes. Either way it's tax incented, the difference is partly semantics. Giving those shares to trade unions instead of individuals makes it more like the classic pension system than the 401k, but the concepts are similar enough that it's quite possible to see the Swedish approach here as almost a direct forerunner to the 401k.
That generation of social democrats was more of socialists than democrats and that was where it all went wrong, making their own party ideology to state ideology.
Taking over private property in that way is nothing more than theft and a breach of fundamental principals in Swedish society and especially against the consensus agenda (see Saltsjöbadsavtalet).
Social democrats kicked out the communist from the party in 1917 and by that becoming a democratic party and in 1921 heading their first government, but by this communism where basically back in fashion again.
As a Norwegian I keep getting surprised by things I learn about Sweden. Sweden seems to have been a lot more socialist than Norway. In some respect might still be.
The housing system in Sweden sound more socialist than what we got in Norway today, judging from how a Swedish friend has explained it to me.
However welfare benefits seems more generous in Norway. How sick people are dealt with in Sweden seems harsher. No pay the first days out of work, and maximum days sick decided by the government for different ailments etc.
It is a mixed bag. In some aspects Sweden is more socialist and in other things Norway. But then, all government programs is not socialist by design, some is conservative other liberal. And I think that Norway is more conservative than Sweden.
How to tell if a government program is socialist or not? Rule of thumb is if the labour union or any other part of the labour movement is in on it.
'Löntagarfonder' originated from the Swedish labour union LO, LO is the main funder of the Social democrats. Up to the 90-ties membership in LO included a forced membership in the Social democrats.
Housing system is pure madness, rent is set by negotiation between the land lord and Hyresgästföreningen, historically a political ally to Social democrats!
So in Norway you can surf to finn.no and find an available apartment within minutes. In Sweden, nope!
One crazy thing I remember from Norway is that NRK can take money directly from your own bank account or contact your employer to take it from the salary if you don't pay the TV license ('kringkastingsavgift')!
> Housing system is pure madness, rent is set by negotiation between the land lord and Hyresgästföreningen, historically a political ally to Social democrats!
Friendly reminder to not forget the stupid ass national (but regionally determined) rent control regulation.
Oh, and the Planning and Construction law which most likely is the most tedious and single longest law in the Swedish law book.
It's no wonder that you have to already rent an apartment, to rent an apartment in the Swedish cities and that Swedes get dumbfounded when you tell them you can get an apartment within days in other cities (although you'll have to pay more for it) around the world..
H&M is not an example of that, it remains in Sweden, its real growth came later than what you are refering. In the 90s however its owner Stefan Persson threatened to move it due to proposed wealth taxes. The workaround was a using tax exception for stocks listed a certain way on public exchanges (O-listan). In the end the government adjusted the tax legislation and H&M stayed. https://www.affarsvarlden.se/bors-ekonominyheter/formogenhet...
I'm not Swedish, but I find this area relatively interesting. The idea is fairly straightforward: Sweden's model created low income inequality between the poor and the rich, but did not create low wealth inequality. A large proportion of Swedish capital was controlled by 15 families, and most wealth his still controlled by a small inherited class (many descended from the old Swedish nobility), and 80-90% of wealth is passed down. We might think of Sweden's long period of dominance by the Social Democrats from the 1930s - 1970s as a sort of bargain between the lower/middle and upper classes: pay your workers well, ensure a strong welfare state, don't be too ostentatious and the lower class will let the upper class run their businesses as usual. One family, the Wallenbergs, controlled ABB, Ericsson, Electrolux, Atlas Copco, SKF, AstraZeneca and Saab. In the 70s they employed 40% of Sweden's workforce and were 40% of Sweden's stock market's worth.
For Socialists, this led to an obvious question: what should be done about this? Their solution: most of this wealth comes from ownership of Capital in Sweden's large firms (this is an important distinction between Sweden and Denmark - Sweden has many more large corporations). Workers represented by the trade unions would own a large share of capital and then redistribute the profits from capital back to the workers (and reinvest in the firm and in worker training and investment in new firs controlled by workers). I think this is a relatively interesting take on the idea of "worker controlled enterprises". A very leftist take on all of this is here:
https://www.jacobinmag.com/2017/08/sweden-social-democracy-m...
Of course it didn't happen, as part of the larger global ant-left backlash beginning in the late 70s which took basically everyone by surprise (see also The Iranian Revolution, the American Evangelical movement, Likud, the rise of the BJP in India...).
It's still an interesting idea, I think made more interesting by the rise of index funds like Vanguard. Increasingly capital is controlled by a small group of massive investment funds whose goal is to do nothing. This has led to the half-joking idea that index funds are worse than Marxism. I'll let Mark Levine explain:
" Virtually no one that I talk to in or around the financial industry really believes the "common ownership of companies by mutual funds undercuts competition" theory. It just seems too attenuated: Sure, it might be in BlackRock's and Vanguard's interests if the companies they own don't slash prices to compete with each other, but it's not (usually) like they call up executives to tell them that. Plus "competition" is usually a more nebulous concept than price-cutting: It might be in shareholders' interests to keep prices high, but it is also in shareholders' interests to see more innovation and more competition on quality. If you own the entire economic pie, your interest is in growing that pie, not in keeping each company's slices the same. And the way the pie grows is through the normal capitalist processes of innovation and competition and creative destruction and so forth.
Still I am so desperately fond of this theory. What I love -- what is made so clear in Jacobin's discussion -- is how it wraps capitalism all the way around to socialism. Index funds are in many ways a perfection of financial capitalism: Not only are they the result of scientific finance (modern portfolio theory, the efficient markets hypothesis, etc.) replacing earlier and less rigorous forms of investing, but they also concentrate and align shareholders with each other, and corporate managers with shareholders, in a way that seems like it would be well suited to "ensure that corporations remain within capitalist logic." And the result is something that both Marxists and also financial analysts think is quasi-communist, that "undermines the basic logic that made capitalism an economically and politically successful system in the first place." What if Marx was right that capitalism would ultimately destroy itself, but the way that it does so is through index funds? "
Anyways, all of this sort of suggests on silly idea: why not just wait until Vanguard controls most of the stock market and nationalize it? I don't think anyone believes this, but it's certainly something to think about.
The efficient market hypothesis is not an example of good science. It's still only a hypothesis because there's so little evidence to support it. The market is rife with failures due to all the quirks of human psychology. Any realistic model for the future must be built on the framework of behavioral economics.
Any ideas where I could find more details on H&Ms move? They appear to be listed in the Swedish stock exchange and headquartered in Stockholm so I’m curious how they ended up moving back.
H&M and Tetra Pak moved back to Sweden in the 90-ties after promises from the then current social democratic leader Ingvar Carlsson that they would never be introduced again.
Not to take away from your interesting comment, but it's not written "70-ties", just "70s" - the first one reads as "seventy-ties", which is odd :)
EDIT: Updated "70's" to "70s" because of the great child comment that links to an article showing that while 70's is technically correct it's much more usual to exclude the apostrophe.
As long as we're exploring punctuation, the apostrophe in that case is valid and correct, but it's growing obsolete as it becomes more normal to write "70s".
Almost all the style guides recommend no apostophes on the end. Rather, apostrophes are reserved for numerals that are lefts out, i.e., '60s or 1960s, but not 1960's.
I guess it depends on how you define acceptable usage.
Only a generation ago, it was widely taught to include the apostrophe. Even then it wasn't universal, but it was one recommended way to do it.
For example, I have on my bookshelf "Webster's NewWorld Dictionary, Third College Edition" (copyright 1994) which says on p. 1560: "An apostrophe is used ... to show certain coined plurals. ... Figures may take either an apostrophe and an s or an s alone. 1990s or 1990's".
It also mentions a rule about using apostrophes with plurals of abbreviations if the abbreviations include internal periods, and it gives the examples of "Ph.D.'s" and "ICBMs". I guess internal periods have fallen out of favor too.
Anyway, the overall point here is it was taught this way relatively recently, and I don't think language moves so fast that what was taught a generation or two ago isn't considered acceptable usage. I'd call it correct but archaic.
His anti-tax setup makes a lot more sense to me now. If I had build a company from nothing just to seen the government getting so close to stealing it away from me, I would also do my best to make sure they will benefit the least amount possible from it.
> Kamprad’s heirs now won’t have direct control of the firm. They will have a more meager fortune derived from family-owned Ikano Group, a collection of finance, real estate, manufacturing and retail businesses which had total assets of about $10 billion in 2016.
I do not think the word "meager" is really appropriate when we are talking about $10 billion in assets.
So, who ultimately appoints the directors? It sounds like it is Kamprad's heirs, but through some layers of indirection that prevents them from meddling directly.
There have been many inquires into this by Swedish journalists over the years, but it's a very dense structure of companies with unclear ownership and structure. So who controls it is unknown.
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.
Avoidance, not evasion. If you're a very frugal person, it seems pretty normal to hate taxes. No point in saving on everything, yet then throwing x% away in taxes (yes, I am aware taxes fund a lot of good things, but at the same time a lot of money is wasted -- I'm sure Kamprad thought he could better manage and deploy that money)
Oh nice, if he thought he could use the money better, then sure, please carry on not paying taxes. Can I do the same? Or is that a privilege reserved for the mega-rich?
Or let's call a spade a spade, and let's call tax evasion tax evasion.
Want to stop avoidance? Make proper laws. If it's legal (even through lobbying), then it is legal. And frankly I don't see why you shouldn't if you legally can. But to each their own views on this.
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.
You can't have a robust and clear taxation framework in a plutocracy, because government is owned by the rich and run for the benefit of the rich. And they're hardly likely to support legislation that forces them to pay more tax. (Even if some are, there will always be a powerful lobbying effort agains any such move.)
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.
A related problem is that international stage is a market by itself. Nations compete for the business of large corporations. Which leads to creation of ridiculous tax exemptions and loopholes.
Countries can't have it both ways. You can't hate legal avoidance, while at the same time trying to steal tax revenue from your neighbour with similar tax incentives.
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.
My activity in this realm has been to contribute to open source software, both as an author and as an administrator.
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).
Anyone can benefit from OSS, corrupt individuals included. I'm not sure if that kind of action can help improve legislation or decrease the number of loopholes.
What, you were serious when you demanded that I personally fix the world?
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".
Yes, I'm serious. All too many people just claim the system is broken and nothing can be done to fix it. Understanding how it works and fixing it can and does work. Can't speak for the US, but in Europe, it certainly can work.
Taking you at your word, then perhaps meditate on whether "Start a political party and fix it" is the kind of statement which would motivate an activist. In my experience (and I've donated literally years of my life to supporting and nurturing creative people), asking questions and listening, truly expressing interest in people's ambitions, is more effective than shaming people for not having taken on ridiculously unrealistic goals.
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.
The politicians will never bite the hand that feeds. The mega rich both write the laws and benefit from them, this does not excuse the behavior morally, only makes it legal on paper (which, apparently is enough for some of you).
But who is at fault here then? You can blame the wealthy all you want, but it would not be possible without the cooperation of politicians that are elected by the people.
It's interesting because you pretty much said it in your first paragraph: it's legal, through lobbying. Make proper laws? How, if it's the companies benefiting from the current state of affairs writing those laws? How, if the government isn't serving us the people, but the interests of those that can grease the palms of the persons in charge?
> If it's legal (even through lobbying), then it is legal.
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.
You're not calling a spade a spade, you're calling a trowel a spade. While they have similar means of operation and mostly similar results, their definitions are commonly understood to be different. Trowels are single handed tools, spades are double handed. Tax avoidance is carried out publicly and legal, if possibly unethical, whereas tax evasion is carried out in secret and is illegal.
Sure, call tax evasion tax evasion, but AFAIK Kamprad wasn't doing it. Authorities go very hard against tax evasion, the illegal thing. Tax avoidance is by definition things that are legal, not tax evasion.
In fact authorities are pretty lenient on tax evasion by the hyper-rich. The number of convictions and jail sentences isn't zero, but given the sums involved it's pitifully low.
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.
I think there are also significant risks involved when facing the hyper-rich. SMEs are a dime a dozen. If some get sacked for skirting or breaking the rules, nobody cares. But if you piss off a large megacorp enough to make it e.g. build its new factory elsewhere, or move its business away entirely, then suddenly your political career is on the line.
Kamprad didn't really move to avoid income taxes; Sweden has all these decades had a relatively high income taxation, even when Kamprad moved back to Sweden from Switzerland.
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.
Please cut the ’avoidance, not evasion’ bullshit. This scheme is outright evasion, legalized by lobbying in Brussels against national law. You know that otherwise you wouldn’t care to point out this nuisance.
I understand the frustration, but I really think this is an important distinction to make.
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.
The reason these particular laws inspire such revulsion is that they are bought and paid for by the fabulously wealthy. The law itself is immoral and illegitimate.
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.
> I really think this is an important distinction to make [...] they require two different solutions.
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.
An argument, if anything, for open, transparent, and responsible governance. Certainly something that we are particularly struggling with at the moment.
Sorry, but why is it the EU's fault if countries create tax incentives? I've read that previously in UK pro-Brexit media but never understood how that can be true. I'm pretty sure that neither the Netherlands nor Ireland were forced to create low-tax regimes.
I propose a new word to solve this problem: avoision. This word describes a practice that is in all essences tax evasion but may not be technically found by courts to be illegal, or may be an untested grey area legally.
I think it's a nice, cromulent word that we can all agree on.
The commonly understood definition of tax evasion includes that it must be illegal. You are simply appropriating more severe terminology in an attempt to inflate the strawman.
I can't speak for the majority of people but I'd venture that more people would put "morally sketchy and ethically bankrupt tax avoidance" into the "tax evasion" bucket than not.
You find the introduction of definitional precision to be an annoying, cheap trick?
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.
I see a ton of imprecision in technical discussions here daily, and that's a topic on which one would expect some expertise here. And yet the pedantry that receives is far less annoying than the inevitable tax avoidance cliche-rants.
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.
Natural language philosophy constitutes legitimate dialectics, not pedantry. In the former you add precision by first synthesizing an agreement of terminology and introducing relevant definitions. In the latter you argue against the meaning of a word instead of the intended meaning of the argument.
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.
>Natural language philosophy constitutes legitimate dialectics, not pedantry. In the former you add precision by first synthesizing an agreement of terminology and introducing relevant definitions.
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.
This is not a philosophy seminar, you're not engaging in normal conversational norm setting at this point, and this game was boring in high school. Have fun, but you'll have to have it with someone else.
Your view of rigorous language is debatable. In wittgenstienian sense Language is its use. So one might argue you are playing different language game (aka legal language) in a informal conversation game in a internet forum.
It's not semantic, or a legal definition. It's a very explicit and important difference – 'evasion' is illegally avoiding taxation, and 'avoidance' is legally avoiding taxation.
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.
> 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.
Have to disagree. Laws may have something like an ethical base, but only as a nod to practicality - people have to believe in them. They are pragmatic to the core. Sure, there are ethical schools of pragmatism, and we surely include them in our ethical discussions (trolley car problems etc) but how the law lands on the trolley car is NOT any sort of arbiter of ethics?
> Sure, there are ethical schools of pragmatism, and we surely include them in our ethical discussions (trolley car problems etc) but how the law lands on the trolley car is NOT any sort of arbiter of ethics?
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.
Yeah, I think that is a little rich of IKEA. They get tons of goodwill from the Swedish system but contributes very little to it themselves. For example, the Swedish King or some government official is often present when IKEA opens a new store somewhere in the world. If an new one is opened in Sweden, the local politicians help them out by adding bus stops and even new bus lines servicing it.
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.
"registered basically nowhere" != "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 still seems an hypocrisy to me. In any case, they use the flag as a marketing tool, something which, from my point of view, doesn't show much respect for the flag.
I think there is an unfortunate belief among many of HN’s primary user demographics that regional identity is the same as what political apparatus controls a region. I think it’s easy to fall into this trap when you and your community lack any kind of coherent cultural origin story, as many Americans do.
Officially there is. Among the web of foundations is a charity dedicated to the art of furniture design. Less clear what it does in practice, since furniture design also happens to be IKEA's business, and the charity owns portions of IKEA.
Apropos Getty, my understanding is that the gentleman cared about fine furniture and classical (Roman) sculpture, which were housed (along with some paintings, namely a Corot) in the original Getty Museum.
This museum was a fine replica of a Pompeian villa (complete with herbs garden patch) in Malibu, and according to the deal with the upscale neighborhood, you either showed up with a bus ticket or made an appointment for parking in the premises. One day last century they were kind to a foreigner who showed up early but unannounced with his family, having just seen a small sign in the road.
When I was young and getting my driving license in Madrid I had to take a bus to the place were exams were done, in the south of Madrid(Mostoles).
A friend of mine worked on IKEA and he told me that it was a lot of expectation as the founder had gone to Spain and it was taking the same bus that I took in order to visit the stores in Spain.
It was surprising to me that someone owning billions will take the bus, while I was trying so hard to earn the necessary money in order to get rid of it.
The king of Norway in the 70s, Olav the 5th took the tram with regular Norwegians. This was during the oil crisis so it was a way of showing solidarity with citizens who could no longer afford to drive.
I think trying to not put yourself too high about everybody else is a cherished ideal in Scandinavian countries. It has not gone down well that the present crown prince and princess transferred their kids to private school e.g. They claim it is to immerse them more in english. But people are not happy about it.
The testing center had their own car? Is this standard in Spain/Europe? I had to pay an instructor with a car to drive me to the testing center and let me use his car for the test while he waited around.
In Spain you usually enroll in a driving school where you have theoretical lessons (there's a theoretical exam that you must pass) and then they give you driving lessons with their adapted car.
When you're ready an official from the corresponding ministry joins you and your instructor one day for a practical test on the street/highway.
In the US, teenagers need to log tens/hundreds of hours driving under their parents’s supervision (on a learner’s permit) between the instructor driving sessions and the official road test. Do you really go straight from driving school to road test with no learner’s permit phase?
> In the US, teenagers need to log tens/hundreds of hours driving under their parents’s supervision (on a learner’s permit) between the instructor driving sessions and the official road test.
There is no US rule and the state rules vary considerably, many states have no logged practice hours requirement, and it doesn't
doesn't seem like any are in hundreds of hours; I think 65 is the maximum and most with a requirement are 50 or less.
In Canada I just did 4 hours with an instructor and then went for the test and bought a car. Most people drive around with their parents for 8 months on a permit but you don't have to log anything or prove that you did it, you're just not allowed to drive by yourself.
It is exactly the same way in Poland - second set of pedals for the instructor. You are supposed to do your whole course and exam in such an adapted car.
In Lithuania/Europe, testing center provides standardised car for the exam. You're not allowed to take test in anything but provided vehicle. Which is clearly marked and equipped with extra mirror/brake for examinator.
Driving schools have their own vehicles as well. Big part of their fleets is usually same as exam vehicles so you could get used to those.
In Austria all the driving schools I've seen so far have their own branded cars. I'm pretty sure I also took the test in one of the driving school's cars, since they had their own test course right next to the school, and it was all paid in one package (theoretical and driving lessons, written and practical test).
> Works for the sides, but how to do make a smooth transition to the top? Without cutting it equally short everywhere?
My technique is to keep the machine at the same angle (blades roughly vertical) while moving upwards: as it slides over the curvature at the top, the distance between the base of the hair and the cutter increases smoothly.
This is with the biggest comb clipped on.
I then remove the comb and use my fingers instead, sliding the blade on top of them, to get a longer cut than with the combs.
The machine I use is a Panasonic ER-1611 which is not cheap, but here you can see a picture including a side view for the angle:
http://tondeusebarbe.fr/wp-content/uploads/2015/05/test-pana...
I've also used before a cheaper Phillips that worked fine but wore out after some years, and the first one was a Solac that I still have in Spain and works as new.
The technique works similarly for all of them, but both the Solac and the Panasonic were sold as "for professional use" and they do work noticeably better.
I've been doing this since shortly before starting my military service in Spain long ago. You get better with practice.
Oh, and try to arrange a couple of parallel mirrors so that you can see the back of your head.
Giving yourself a fade isn't as hard as it seems. Short answer: use different sizes of the plastic guards, and do a bit of a flicking outward motion with your wrist where you want to blend.
That doesn't always work, depending on the shape of your head, the texture of your hair, etc.
I for one don't care about it much, and my job allows me not to care, but many people do care for both personal and professional reasons. Any kind of job where you want to persuade people basically requires the best look you can afford. It's basically an investment.
Gah to think of all the times I managed to fail to persuade people because I have short hair :)
To me it is a mix of feeling that spending money on cutting my hair is wasteful, spending time to go to a hairdresser is wasteful and so on. It's just a maintenance chore. And I don't feel it has ever caused me to perform subpar in my job or to have people take my arguments less serious. But I can see that form some people this might be the case.
In a way this is a luxury that men can afford themselves, if a woman would go to work with a very short hair it would immediately count as some statement rather than being efficient.
My understanding is that the Ikea corporate structure is much, much more complicated than this article even hints at, and in fact it is owned by so many different parties with different interests that go far beyond what is suggested here. Additionally, I think the Dutch are now the main owners of the main portions of the company that most associate with the name Ikea, as of a few years ago.
In 2013 I attempted to make a holdings chart for the IKEA galaxy of companies, and it gets really complex very quickly. If you Google ikea corporate structure, you’ll see a bunch of charts that look the same, but they are too simple and gloss over a lot.
As I understood it, it’s all heavily based on reducing tax liability as much as possible. E.g. each ikea store is a franchisee which operates at a loss and pays royalty fees for using the IKEA brand, and of course pays out for products and other vital services to probably hundreds of other ikea-related companies. And that’s even before dipping your toes into their manufacturing world.
Interesting that the company essentially owns itself, as one of the defenses of companies is any money going into them eventually findable their way to people: taxes, employees, owners, or (recursively) employees or the taxes, employees and owners of their suppliers. In the end it’s its people behind them. But this breaks that mold.
Seems like either giving control to family nor professional managers is a good option. Family usually has no clue about business and professional managers succeeded in mastering the art of moving within company, not making it a business. When a founder goes away, it's always uncertain where the company ends up.
"Great are the stars, and man is of no account to them. But man is a fair spirit, whom a star conceived and a star kills. He is greater than those bright blind companies. For though in them there is incalculable potentiality, in him there is achievement, small, but actual. Too soon, seemingly, he comes to his end. But when he is done he will not be nothing, not as though he had never been; for he is eternally a beauty in the eternal form of things."
Also would you like to buy a cheap but functional home office desk?
And even less time not to type this meaningless and unnecessarily rude comment. My meaningless and unnecessarily rude comment, on the other hand, took quite a bit longer.
Sometimes when you ask someone a question like "where did that quote come from" you get more than just the title of the book. Maybe they have an interesting story to retell about where they first heard it. Maybe they can give you a more personal perspective that resonates a bit more than whatever you'd find from a cursory glance at some Google search results.
The beauty of Google for quotes - in addition to the obvious one, that you're saving someone else the effort of doing the work for you and getting your answer in seconds - is that you've got search access to primary sources like books and many periodicals. That is important, since the more popular a given quote, the more likely it is that it will be misattributed. We puny humans absolutely cannot be trusted to attribute quotes correctly.
I suppose it's a matter of personal politics whether that all matters more to you than getting an anecdote back like, "I was listening to an old radio show when I heard Winston Churchill intone Great are the stars, and man is of no account to them," or something.
Some millionaires care about money so little they give it away to people that need it more rather than designing elaborate structures to hide it from their family and the taxman...
Depends on the mission, the end goal (if any), as with so many other things.
If you're Gates, you likely feel an immense obligation to not destroy $100 billion (as with Buffett), as it's meant to be put to use as a public good. That has also become his professional life. And ideally you conservatively grow it further, to be able to bring that many more resources to bear on extremely expensive problems.
This is why my respect for Bill Gates has gone up so much over the years.
It’s cool when folks like Warren Buffett pledge to give away their personal fortunes when they die. However, his personal sacrifice is actually quite small, as he only gives it up when forced to by death.
Bill Gates, on the other hand has two valuable resources to offer and he is actively giving away both right now: 1) much of his vast fortune, 2) his time, expertise, and influence to champion causes for the greater good.
Buffett doesn't exactly spend it now (he's got famously cheap tastes). He's also giving much of it away while still alive: $3bn more in Berkshire Hathaway shares to the Gates Foundation last year. Forbes claims that's 40% of his BH holdings given away so far. http://fortune.com/2017/07/10/warren-buffett-donates-gates-f...
I read this in the book on how to get rich by felix denis in which there is quote: “Money, it turned out, was exactly like sex. You thought of nothing else if you didn’t have it, and thought of other things if you did.”
Basically a lawyer DAO, with the little problem that the involved constituting organelles have a interest of taking over and eating the uncontrolled host.
Well it won't last - greed will takeover when the employee realize he can be fired - so what to do; OUTWIT OUTPLAY OUTLAST a coalition of family members is how it all starts
Am I missing something or couldn’t a big enough company just buy out 51% of the owning companies and take over/shut down IKEA?
This way his family still could get a fast payout if they all work together.
On the other, why hoard so much? Could he have been at least slightly more generous all along? Wouldn't that, done earlier, create a positive sooner? A positive that could have been compiling social compound interest (if you will)?
I under the rules of the game (i.e., capitalism). That doesn't mean you have to buy all in to those rules. There are (personal) alternatives.
If IKEA can generate a higher return on capital than generally available, it could make more sense to accumulate and compound the money for as long as possible so he can donate a bigger amount later. Hard to quantitatively compare to the utility of early philanthropy.
What I'm suggesting is a form of portfolio diversity.
And who's to say that if you invest in NPO X today that the "ROI" won't be significant5 or 10 years from now. Why not try to put a value on lives saved, impacted, etc.?
So yeah. Use Capital as your only measuring stick and you're correct. But the real truth is, there's more to life than Capital. But of course the capitalist doesn't want you to know this.
Note: I'm not suggesting better (or worse), just different. There are alternative measurements.
I agree that there's much more to life than capital/money.
What I'm saying is its very very hard to put a value on life saved/changed and compare that to money. Is donating $1M to an NPO distributing malaria vaccines today better or worse than donating $2M worth of malaria vaccines in 2 years? Who knows? How would you even begin to compare those 2 scenarios? You'd have to translate the subjective costs of being sick, costs of a life, all the uncertainties around effectiveness of the vaccine, uncertainties around how well the NPO uses its capital etc. into a dollar value to compare.. there is no right answer there, its just too uncertain.
So if he did a similar calculation and decided more money later is better for the world than less money now, well I can't fault him because that calculation is infinitely complex. Seems like you are saying donating say 1% every year is better than donating 0 and then 100% at the end, but it is very hard to tell.
I don't want this to sound snark / too direct but...
Bill Gates must have some sort of formula. My sense is also, some of that formula is what he can contribute. You can't do much contributing when you're dead :)
Nothing of value is easy. And big progress / big change takes (big) time. The longer you wait the more difficult it is to move the needle.
My question is kinda like an A/B test. That is, instead of waiting til the race was over, what would the impact had been had some of this started 20 years ago?
Nothing was hoarded. IKEA is a private company, and the founder likely held a lot of that ownership. He didn't simply grab people's cash and hide it in a box. To turn that ownership value into cash so he would not "hoard so much" would be to turn ownership (and hence direction) of IKEA over to others.
To sell ownership would mean others would turn cash into ownership, so there's really no net gain/loss in terms of "hoarding," only a change in assets.
He decided to keep IKEA independent. His value represents the value IKEA provides to others and is not taking away from society.
By defintion, more than you need is hoarding. He could have distributed (read: invested via donations and grants) more sooner. Why wait til death? Unless, there's some personal "quirk" (e.g., hoarding) prevented him from doing so?
As they say, ya can't take it with you. Why not go with your bag lighter? Why not go you're leaving with seeds planted and growing? Why risk some unforseen legal snafu? Etc.
>He could have distributed (read: invested via donations and grants) more sooner.
The only way he could have done that is to sell the company, and using your definition, as soon as the company was worth more than he needed personally, he would have to sell it to not be a hoarder.
I'm pretty sure in that case the company would never have grown to what it is, as there's ample studies showing that founders, who know a business, provide more growth than letting outsiders run a company, when averaged across all companies. I'd suspect this is the case for this person also.
So your plan would have resulted in less total worth provided to humanity.
And, as I pointed out above, the only way to realize that value is to sell ownership - so now you've removed some cash from someone else to get ownership, given that cash to this owner, for a net zero change in cash available for society, with a likely less value add over time. This is why these ideas do not work economically.
Warren Buffet is a good example of this - he was far better at allocating capital than most (perhaps anyone), and when he dies the world will see that worth transferred to charity. Had he constantly handed it over earlier to less efficient capital allocators, there would have been less growth, since others are likely far less capable than he was/is, and there would be less total for the planet.
Less capital growth? Perhaps. But I'm suggesting that capital isnt the only measurement?
How many live is Buffet saving from X while his capital is locked up in traditional growth? Big efforts take time. Most of the low hanging fruit is gone. Starting sooner beats starting later.
Again, a Buffet holding stock is not locking up any capital. For him to sell it, realizing that capital, requires someone trading their capital for the stock. The total stock and total capital remains unchanged.
If an apple is worth a dollar, you cannot transmute the apple into a dollar. You can trade it for one, but there is still one apple and one dollar in the economy.
Stocks work the same. A rich person holding value in any item other than capital is not hoarding capital, any more than a person hoarding apples is hoarding capital.
