Sunday, May 17, 2015

$179 million for a Picasso and Zero for the Arts

Good morning.
"And the beat goes on………………."

As widely reported last week, the Picasso painting Women of Algiers sold for $179 million (including the Christie's Auction house 12+% commission) to set a new record price.  The price ($160 million without the Christie's fee) was driven (so the speculation goes) by wealthy collectors seeing investment potential and by newer collectors looking for quality pieces - and doubtless by some tax advantages.  Price is apparently no object and a number of experts see no end in sight to the amounts that will be paid for major works as they become available.  This same painting last sold in 1997 for $31.9 million, so profits are there to be made.

$179 million.  Bigger than the NEA's annual budget.  

So once again, my thoughts turned to the logic (to me) of an added fee (let's not call it a tax) on sales of major art works (let's arbitrarily say those that sell for over $10 million) that would augment (not replace) the Endowment funding.   Why not add a 10% premium to any sale of art over $10 million?  I doubt sincerely that such a premium would deter the many private investors who are playing this rarefied game for profit and prestige.  And, in the aggregate, that extra money would help fund a range of art organizations and / or arts education projects; an additional $16 to $17.9 million on just this sale.  How much might that be over the course of a year for all sales over the threshold?  I have no idea.  $50 million?  $100 million?  

Ok, back to reality.  This won't likely happen because the powers that be who are making money off this game have greater political juice than we do, and would likely succeed in killing any such attempt before it got off the ground. In the political sense, it would be difficult for us to even get a bill introduced in Congress, let alone out of committee.  I think the idea has even been put forth before.  This is yet another example of the kind of thing our political impotency closes off as a possibility to even consider.  

And even if we could mount a successful effort, there would be other problems, not the least of which would be the argument by those who think any public funding for the arts is wrong or a waste of money that with the income from this fee, the arts (the Endowment) would no longer need public funding support.  This argument that the arts ought to subsist on private funding is one that surfaces every time there is any discussion about funding for the arts.  It is premised on the unfortunate conclusion that there is a dollar amount that is enough for the arts.  That number is currently near the NEA's annual $150 million (+/-) budget, and that conclusion isn't based on anything other than the fact that that's what the budget has been for awhile.  The whole budgetary process is bizarre - including nonsensical operating premises.  

When I was Director of the California Arts Council, I floated the idea of adding 25 cents to the price of a movie ticket (in California), the money to come to the Arts Council and support Arts Education (a bit of an easier sell than general arts organization funding).  Again, I didn't think an extra quarter would discourage movie goers.  And in the past decade the price of movie tickets (depending on what city you live in) has gone up by several dollars - surpassing the ten dollar threshold in some big cities.  I even proposed that a percentage of that extra 25 cent ticket charge (again let's not call it a tax), would go to the movie theaters themselves to cover their out of pocket costs to do the accounting on the money payable to the arts council so it wouldn't cost them anything (and indeed they would likely even make a small profit on the deal).  

I had (naively) hoped the major studios might be persuaded to go along with such an idea as a way for them to support the arts (something they seemingly favor - as long as they don't really have to do anything).  It wouldn't have cost them a dime.  

As you might surmise, this proposal (never made public - just floated privately) met with the strongest possible opposition by the studios and the theaters.  It was as though the proposal personally attacked motherhood, Girl Scouts, veterans and apple pie.  And, of course, the arts didn't have the political clout to even consider any attempt to take on the film industry. And even had the idea been successful, the Arts Council would likely have faced that argument that with this income source, the Arts Council (and the Arts) would no longer need any general fund support.  

There have been some successful local area attempts to add fees, or at least get a share, of certaintax revenue, to support the arts.  The two most successful of those efforts being: 1) the TOT (tax on transit) or hotel tax income, often shared locally as a way to support the arts, and 2) the percent for arts fees charged local developers to pay for public art in municipal areas.  

But pursuit of most added fee revenue ideas - as a way to support the arts - has largely been closed off because we simply haven't got the political power to fight those who oppose us. (That we actually have the potential for that kind of power is another issue.  Because with political power we could do this kind of thing.)

If the super rich want to use major artworks as part of their investment / tax strategy, as well as one of the mechanisms they use to trade in prestige and cachet, I think they can easily afford a ten percent premium that would be "extra" support for the arts and the hundreds of projects that could be supported.

Last year's federal budget was over $3 trillion.  The NEA got a little over $150 million.  That's one half of one hundredth of one percent of the total budget.  Surely America can afford a full one hundredth of one percent to support art and creativity for its citizens from whatever source.  

One painting, in 20 years, went from about $32 million to about $180 million.  A nice profit for all those involved.  If those people had to pay ten percent more, I wouldn't feel too sorry for them.  

Maybe someday…….

Have a great week.

Don't Quit