A Law of "Unintended" Consequences? United States Federal Taxation and the Market for Modern Art in the United States

Deirdre Robson

Abstract


This article aims to explore a to-date little considered nexus between U.S. Federal taxation and the American art market. Lacking so far in an increasing body of studies of the relationship between tax policy and the arts is a discussion of impacts which Federal taxation might have had upon the American art market for modern art rather than arts sector more generally. The scope of this article is two-fold: first, to posit a nexus between Federal revenue codes and the systemic structure of the nascent New York market in the mid-twentieth century; second, to explore how the radical tax reforms of the 1980s impacted on the New York art market and collector preferences. In relation to this, this article will explore two cornerstones underpinning Federal taxation: first, the tax-exempt status given to non-profit institutions; second, the charitable deduction allowed against Federal tax (personal income tax, estate tax) liabilities as part of the American ethos of indirect giving.

Keywords


taxation, United States, Federal government, Revenue Code, income tax, estate tax, charitable deduction, tax reform, AMT, art market, museum

Full Text:

PDF HTML

References


Auten, G.E., Clotfelder, C.T. and Schmalbeck, R.T. Taxes and Philanthropy Among the Wealthy, in Slemrod, J. (ed.) Does Atlas Shrug? The Economic Consequences of Taxing the Rich (New York: Cambridge University Press,1997).

Bakija, J. Tax Policy and Philanthropy: A Primer on the Empirical Evidence for the United States and Its Implications, Social Research, 80/2 (Summer 2013), pp 557-582.

Barr, A.H. Chronicle of the Collections, 1929-1967, in Painting and Sculpture in the Museum of Modern Art, 1929-1967 (New York: Museum of Modern Art, 1977).

Belk, R.W. Collecting in a Consumer Society (London: Routledge,1995).

Chandler, L.V. Inflation in the United States, 1940-48 (New York: Harper, 1951).

Clotfelter, C. T. Federal Tax Policy and Charitable Giving (Chicago: University of Chicago Press, 1985).

Clotfelder, C. The Impact of Tax Reform on Charitable Giving: A 1989 Perspective, NBER Working Paper #3273, (March 1990).

Clotfelter, C.T. & Ehrlich, T. (eds.) Philanthropy and the Nonprofit Sector in a Changing America (Bloomington: Indiana University Press, 1999).

Clotfelder, C. Charitable Giving and Tax Policy in the U.S., CEPR Draft 050712, 2012. Available at www.parisschoolofeconomics.eu/IMG/pdf/may2012-paris-clotfelter.pdf

Crockett, J.P. The Federal Tax System of the United States (New York: Columbia University Press,1955).

Dean, C. Art Galleries Enjoy Boom, New York Times, 25 February 1957, p 16.

Feld, A.L., O’Hare, M. and Schuster, J.M.D. Patrons Despite Themselves: Taxpayers and Arts Policy (A Twentieth Century Fund Report). (New York: New York University Press,1983).

Feldstein, M. (ed.) The Economics of Art Museums (National Bureau of Economic Research Conference Report). (Chicago: University of Chicago Press, 1991).

Frankfurter, A. Midas on Parnassus, ArtNews Annual, November 1958.

Fullerton, D. Tax Policy Toward Art Museums, in Feldstein, M. (ed.) The Economics of Art Museums: (National Bureau of Economic Research Conference Report). (Chicago: University of Chicago Press, 1991).

Gee, M. Dealers, Critics and Collectors or Modern Painting: Aspects of the Parisian Art Market between 1910 and 1930. (New York: Garland Publishing,1981).

Genauer, E. The Fur Lined Museum, Harper’s Magazine, 189 (July 1944), pp 129-138.

Glueck, G. Art and Capital Gamesmanship, New York Times, 2 November 1969.

Glueck, G Donations of Art Fall Sharply After Changes in the Tax Code, New York Times, 7 May1989.

Gold, B. Nelson A Rockefeller Collection: Modern Works at MoMA, Arts, XLIII/7, pp 28-30.

Graves, H.S. The Art Collector and the Tax Collector, Art Journal, XXXII /4 (1973), pp 426-7.

Greenberg, C. Art, Nation, 12 Feb. 1944, pp 195-196.

Heilbrun, J. and Gray, C.M. Economics and Arts and Culture. (London: Cambridge University Press, 2001).

Hodgins, E. and Parker, L. The Great International Art Market II, Fortune, January 1956, pp 122-136.

Housley, K.L. Emily Hall Tremaine: Collector on the Cusp. (New York: Emily Hall Tremaine Foundation,2001).

Kirk, A.E.K. The Billionaire’s Treasure Trove: A Call to Reform Private Art Museums and the Private Benefit Doctrine, Fordham Intellectual Property, Media and Entertainment Law Journal, 27/4 (2017), pp 869-933.

Knoedler & Co, The James Thrall Soby Collection, exhibition catalogue, February 1961.

Knox, S. Modern Art Brings Record $1,708,550, New York Times, 8 November 1957, p 1.

Lasser, J.K. How to Raise Money Painlessly: The Good Samaritan and his Tax Deductions, Harper’s Magazine, December 1946, pp 549-551.

Lindsey, V.W. The Charitable Contribution Deduction: A Historical Review and a Look into the Future, Nebraska Law Review, 81 (2003), pp 1056-1096.

Lundberg, F. The Rich and the Super-Rich: A Study of the Power of Money Today. (London: Nelson,1969).

Lynes, R. Good Old Modern-An Intimate Portrait of the Museum of Modern Art. (New York: Atheneum, 1973).

Molotsky, I. Tax Break to Aid Museums, New York Times, 19 August 1993, Section C, p 11.

Morgan, C.O. Charitable Contributions under the Revenue Act of 1964, University of Miami Law Review, 19 (1964), pp 283-306.

Moulin, R. The French Art Market—A Sociological View. (New Brunswick, NJ: Rutgers University Press, 1987).

Paul, R.E. Taxation in the United States. (Boston: Little, Brown & Co.,1954).

Pear, R. The Tax Bill and Arts Patronage, New York Times, 17 June 1986.

Pearson, R. The Modern Museum Abdicates, Art Digest, 15 March 1953, p 29.

Rasky, S.F. Senate Panel Adopts Tax Change on Gifts of Art and Manuscripts, New York Times, 16 Oct. 1990.

Reif, R. (1) Van Gogh ‘Irises’ to be Sold, New York Times, 3 September 1987. Accessed at: http://www.nytimes.com/1987/09/03/arts/van-gogh-s-irises-to-be-sold

Reif, R (2). Van Gogh’s Irises Sells for $53.9 Million, New York Times, 12 November 1987, Section C, p 1.

Reif, R. 50 Paintings to be Sold from Tremaine Estate, New York Times, 7 June 1991.

Robson, A.D. Prestige, Profit, and Pleasure: The Market for Modern Art in New York in the 1940s and 1950s. (New York: Garland Press, 1995).

Robson, A.D. “Industry Art Angel? Pepsi-Cola’s “Portrait of America” Art Annual as an Early Instance of Corporate Art Sponsorship”, Journal of American Culture, 38 / 4 (2015), pp 329-343.

Rodgers, S. (2015) Donate Your Art and Keep it Too: How the Government Subsidizes Art Collections for the Rich and What Congress Can Do About It [online]. Available from http://law.siu.edu/_common/documents/law-journal/articles-2015/fall2015/8%20-%20Rodgers%20Comment%20-%20Proof%203%20Pending%20-sm.pdf (Accessed April 2018).

Saarinen, A. Auction of Art Brings $1,548,500, New York Times, 20 November1958, pp 1, 32.

Sadness in Maine over a Van Gogh, New York Times, 4 October 1987.

Savage, G. Income Tax and the Collector, Studio, 160 /. 811 (1960), pp 222-3, 238-39.

Sherman, T.B., Art and Taxes, Saturday Review of Literature, 39, 7 July 1956, pp 5,6,26.

Sloane, L. Your Money: Charitable Gifts and Tax Law, New York Times, June 6 1987. Accessed at: http://www.nytimes.com/1987/06/06/business/your-money-charitable-gifts-and-tax-law

Stewart, C.H. III The Politics of Tax Reform in the 1980s, in Alesina, A. and Carliner, G. (eds) Politics and Economics in the Eighties. (Chicago: University of Chicago Press, 1991).

Tracy, J.D. Charitable Gifts of Appreciated Property, SMU Law Review, 25 (1971), pp 710-744.

Twardy, C. Tax Law Has Art on the Auction Block, Not on Display, Orlando-Sentinel, 18 June 1989. Accessed at http://articles.orlandosentinel.com/1989-06-18/lifestyle/8906180112_1_american-museums-museum-in-new-art-museum-directors

White, H.C. & White, C. Canvasses and Careers: Institutional Change in the French Painting World. (Chicago: University of Chicago Press, 1993).




DOI: http://dx.doi.org/10.23690/jams.v3i1.69

Refbacks

  • There are currently no refbacks.


Copyright (c) 2019 Deirdre Robson

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.