Change the Tax Laws to Aid All Artists

To judge by the art advocacy climate in Washington, the very future of art in the United States rests on the reauthorization of the National Endowment for the Arts. To question the agency’s legitimacy, its record, its actual effects on artists and the arts, is tantamount to declaring war on the creative spirit.

As an artist who has studied the agency and the broader effects the federal government has on the arts, I have come to believe that the best thing that could happen is to phase out the NEA and instead support all artists by more democratic, less selective methods.

The fatal flaw of the National Endowment is that it is a government agency, subject to accountability. To protect itself, it is obliged to use an inherently undemocratic system of control over its grants. The NEA, itself hierarchical by nature, accentuates hierarchies in the arts scene. Most of its money has therefore gone to the richest institutions, such as the Boston Symphony, the Philadelphia Museum of Art, the Metropolitan Opera, the big-name universities--in short, those who can afford to hire the best grant writers and who, incidentally, provide the NEA with its judges.

Further, it is not artists in general but certain kinds of artists, those skilled at elite insider advancement, who systematically benefit when cultural authority is centralized, as it must be under the NEA. Those who need funding most, those without means or a network or an appealing political profile, are least likely to get it.

Historically speaking, the NEA’s practices run counter to what is good and great in this country’s artistic heritage, which is decentralized, popular, suspicious of authority, hospitable to outsiders. (One thinks of African American music, regionalist painting, Southern writers, for example.) By deciding who decides, by picking winners and losers, by creating an arts establishment on a European model, the NEA has introduced an anaconda into the garden of American art.

What artists and arts organizations need most from Washington is not a $10,000 or $100,000 NEA grant, but changes in the tax code that dramatically improve the conditions of all artists as a class. This kind of reform doesn’t make for feel-good speeches about the indomitable human spirit, but it is what the Art Now participants should be demanding in Washington at their Saturday demonstration.

The Internal Revenue Service discriminates against artists on several fronts, the self-employment tax foremost among them. This tax squanders precious creative time in bookkeeping (hardly the typical artist’s strong suit), swallows up funds from sales of work (often an unpredictable income source), complicates the accounting of two-income joint filers and imposes high retroactive interest penalties on hapless filers. It is a notoriously tricky process for artists to itemize and carry over business expenses: A painter may sell a canvas for $125,000 one year and sell nothing the next. The IRS offers only meager, difficult deductions for self-paid health insurance, rather than providing incentives to purchase coverage or to form insurance groups. And the home-office deduction, which makes sense for many artists, is statistically likely to trigger an IRS audit; hence, many artists shy away from it.

The IRS has created disincentives to individual and corporate charitable giving to the arts. Individuals cannot take a deduction for donations unless they itemize on their tax returns. If Congress changed this rule, the monetary gains to the arts might initially be modest, but they could grow, as individuals and organizations cultivate long-term loyalties. Wealthy givers are hamstrung by arcane rules governing deductions for donated art that has appreciated over a lifetime. The law encourages art works to be brought to auction, where overseas buyers are diminishing our nation’s cultural patrimony.

In the literary realm, ill-conceived changes in tax law in the 1970s effectively killed the backlists that were once the pride of great houses like Alfred A. Knopf and W. W. Norton. Forced to pay tax on inventory, they had no choice but to “remainder” thousands of titles, many of literary merit by younger writers whose careers never had a chance to develop. The decline of books of poetry in print has been nothing less than catastrophic.

These are just a few obvious cases where the federal government harms the arts. Reforming IRS practices to grant relief to artists as a class will mean lost tax revenue. To support artists democratically, which is to say indirectly, will entail a figure vastly larger than the National Endowment’s current $99.5 million appropriation. But artists and the arts all would benefit more meaningfully.

It’s time that the arts constituency lobbied for changes that would help all artists, without regard for our credentials and connections.