| "Man will begin to recover the moment he takes art | | | | seeking differentiable living experiences. In connection |
| as seriously as physics, chemistry or money" Ernst | | | | with its recent renovation, the Aventura Mall in South |
| Levy | | | | Florida now includes a twelve-piece, museum-quality |
| What's the best capital gains tax rate for the sale of | | | | art collection designed to be a destination in a clear |
| artwork? There are currently several arguments | | | | indication that creativity is valued and valuable. |
| being made against reducing the capital gains tax rate | | | | In the third study conducted by the group Americans |
| on the sale of artwork from the current level of | | | | for the Arts titled Arts and Economic Prosperity III, |
| 28% to the 15% rate enjoyed by sellers of real | | | | data was collected from 116 cities and counties, 35 |
| estate, securities and other assets. Arguments | | | | multi-county regions, and five states. The areas |
| against the reduction center around the view that art | | | | stretched from Walnut Creek, California to |
| is not an asset which plays any real role in economic | | | | Anchorage, Alaska. They found that nationally, the |
| activity, particularly job creation, and revenue | | | | arts generate $166.2 billion in annual economic activity, |
| generation. Nothing could be further from the truth. | | | | up 24% over the past five years. That's greater |
| When the forces against tax reduction argue that to | | | | than the 2006 GDP of either Malaysia, Chile, the |
| do so might shift money into art at the expense of | | | | Czech Republic, Columbia, Singapore, and the list goes |
| more productive activities they fail to appreciate the | | | | on! Furthermore, the arts provide 5.7 million jobs and |
| significant and documented economic impact that art | | | | contribute $104.2 billion to household income,and, they |
| has made and continues to make on everything from | | | | produce $30 billion in annual local, state, and federal |
| job creation, to neighborhood redevelopment to | | | | revenue. |
| tourism. | | | | Two specific examples: In Baltimore City, Maryland, |
| Uneven tax policy has also played a role in reducing | | | | the arts are responsible for $270 million annually, |
| museum offerings, and hence the public's access to | | | | provide 6,500 jobs, and generate $12.6 million in local |
| art as a result of the tax treatment of artists. Since | | | | government revenue. In a study released in June, |
| they are only allowed to write off the cost of | | | | 2007, Rochester, New York (Monroe County) |
| materials for donated works instead of the fair | | | | calculated that the attendance and sales revenues |
| market value of the artwork, artists are less inclined | | | | generated by its arts and cultural organizations were |
| to make donations. The negative impact on museums | | | | responsible for a total $199 million annual infusion into |
| is compounded by the strength of the art market of | | | | its economy. |
| late, particularly for Contemporary art, all of which | | | | Far from playing a neutral role in this country's |
| reduces museums' ability to acquire work. | | | | economy, art continues to demonstrate its uniquely |
| Nevertheless, the value of innovation to our society | | | | productive role as a strong generator of jobs and |
| is becoming more and more clear. Businesses that | | | | tax revenue, just as any other important industry. |
| own and display art are perceived as being more | | | | Therefore there really isn't any defensible rationale |
| innovative, interesting and desirable places to work. | | | | for penalizing art investors with an incremental 40% |
| Real estate developers are incorporating art galleries | | | | tax bill. |
| into new condominium towers to entice buyers | | | | |