In the same way that a 401k is set up for a specific purpose, IKEA's foundation was also set up for a very specific purpose. If anything, the purpose was criticized as being overly narrow, and they recently updated it to be more broad.
Whether a firm can do something similar depends on the specifics. I'm not sure how large IKEA was when they set up their corporate structure in the early 80s, but I doubt they were as large as they are today.
I'm not trying to equate personal and corporate taxation though. If IKEA wants to funnel a large portion of their profits into a foundation to control themselves rather than paying taxes to the government instead, I don't see how that is tax avoidance. Many other foundations around the world are set up so the controlling interests of companies can choose how to disperse money instead paying taxes and letting the government choose how to disperse it. Not that there's anything wrong with that either, but having a corporation designed to minimize taxes by funneling profits into a foundation doesn't scream tax avoidance to me.
With that said, there could be other aspects of their corporate structure that I'm not aware of, but like I said, if other companies can also implement the same structure, even if it's across national boundaries, I don't see it as being particularly unethical. Although if someone believed for instance that companies should always repatriate all profits, then I could see how they would think this is unethical, so as usual YMMV.
Edit - To put it another way, there don't seem to be laws restricting investment firms from buying controlling interests in companies to manipulate asset prices/consumer behavior, which to me is far more detrimental than someone who may be pathologically frugal deciding they want to minimize taxes by setting up a complicated corporate structure with a foundation.
> In the same way that a 401k is set up for a specific purpose, IKEA's foundation was also set up for a very specific purpose. If anything, the purpose was criticized as being overly narrow, and they recently updated it to be more broad.
Non-profit taxation laws were not set up with the intent of allowing for profit businesses to avoid taxation. That doesn't mean that it wasn't the outcome.
> Edit - To put it another way, there don't seem to be laws restricting investment firms from buying controlling interests in companies to manipulate asset prices/consumer behavior, which to me is far more detrimental than someone who may be pathologically frugal deciding they want to minimize taxes by setting up a complicated corporate structure with a foundation.
The existence of a worse scenario doesn't prevent us dealing with the current one.
That's true, but practically speaking, that's the outcome when for profit company can create a foundation. Kind of like 401k rollovers to an IRA.
The worse scenario doesn't preclude us from addressing less bad scenarios, but I think we should focus more time and effort on that than on reforming the laws around foundations and non-profits, and by we I mean HN readers and the general public.
I guess it depends on the ratio of effort to reward.
Personally I think arguing for levelling the playing field through tax reform would lead to quicker/easier results than arguing for altering the ways in which companies may invest in one another but that could just be because I've been involved in less discussion around the latter issue.
Whether a firm can do something similar depends on the specifics. I'm not sure how large IKEA was when they set up their corporate structure in the early 80s, but I doubt they were as large as they are today.
https://web.archive.org/web/20201112042116if_/https://www.ec...
I'm not trying to equate personal and corporate taxation though. If IKEA wants to funnel a large portion of their profits into a foundation to control themselves rather than paying taxes to the government instead, I don't see how that is tax avoidance. Many other foundations around the world are set up so the controlling interests of companies can choose how to disperse money instead paying taxes and letting the government choose how to disperse it. Not that there's anything wrong with that either, but having a corporation designed to minimize taxes by funneling profits into a foundation doesn't scream tax avoidance to me.
With that said, there could be other aspects of their corporate structure that I'm not aware of, but like I said, if other companies can also implement the same structure, even if it's across national boundaries, I don't see it as being particularly unethical. Although if someone believed for instance that companies should always repatriate all profits, then I could see how they would think this is unethical, so as usual YMMV.
Edit - To put it another way, there don't seem to be laws restricting investment firms from buying controlling interests in companies to manipulate asset prices/consumer behavior, which to me is far more detrimental than someone who may be pathologically frugal deciding they want to minimize taxes by setting up a complicated corporate structure with a foundation.
https://en.wikipedia.org/wiki/Ingvar_Kamprad#Personal_life