Tuesday, April 27, 2010

Pay Your Income Taxes With Art

You can do this--if you are an artist in Mexico and you pass muster with a government jury. This program has been in place since 1957, when an artist friend of David Siqueiros and Gerardo "Dr. Atl" Murillo was in tax trouble, and the two renowned muralists convinced the government to take work in lieu of taxes. The Mexican government formalized the practice in 1975, and by now has one of the biggest collections in the world.
The government displays these treasures in Mexican museums and government offices and, increasingly, loans them out for special exhibitions around the world. Other works are stored in a huge, climate-controlled warehouse in Mexico City.
Clerks dutifully post each artwork on the tax office website, and the agency hangs them proudly in its own museum in downtown Mexico City. (Visitors to the website can see what each artist has given each year. Click on "Colecciones Pago en Especie" at apartados.hacienda.gob.mx/cultura/index.html). (Chris Hawley, USA Today, 4/16/2010)
The article doesn't say if the government ever sells the pieces. This is a tricky issue. On one hand, the purpose of taxes is to give the government operating funds. Fine art obviously doesn't help there. In fact, in terms of cash flow, a piece of art is costing you money all the time in terms of storage cost (not to mention the cost of capital--after all, the government could sell a piece, invest the money in U.S. Treasuries, and earn a small but safe level of interest. At the very least, that is what they forgo by owning the art.) But if they were to sell pieces, there'd probably be a lot of resistance--especially if they were sold abroad. I'm sure that many Mexicans consider these works part of their national patrimony. But at the same time, Mexico could use the money--maybe to, say, increase the hazard pay of police in Juarez.
Not everyone can pay with art. Participants must register with the Tax Administration Service, Mexico's version of the Internal Revenue Service, by submitting a body of their work to the jury and proving they have shown or sold artworks.
About 700 artists are registered, though not all of them pay with art every year, [program director José] San Cristóbal [Larrea] says. 
 Of course, this means there is an official government body deciding whether or not you are good enough to be a real artist. I know that probably rubs some people wrong, but not me. Art is full of gatekeepers--there is no "pure" or completely just system of finding the best artists. The piece below was paid as taxes in 2008.

Fabian Ugalde, Informative Art, mixed media, 2008

(Hat tip to Marginal Revolution.)

No comments:

Post a Comment