5 ms·

It's mostly money laundering and tax fraud that drives the high valuations. Hype for store of value is pretty close to market manipulation and should be treate

It's mostly money laundering and tax fraud that drives the high valuations. Hype for store of value is pretty close to market manipulation and should be treated similarly. It won't, but it probably should.

tenpies 4y ago
Don't forget bribery. After all, Hunter Biden's paintings netted up to ~$500,000 a piece and I can only imagine how good the return on investment was.
- throwawaylinux 4y ago
  I don't see what they're trying to hide though, they're paid millions of dollars for "consulting" services. It's not like anything is going to happen to them if they just get more. Why bother doing the art and book deals and things? Or is it to inflate the ego of the ones who actually believe they're talented and interesting?
  - googlryas 4y ago
    You need some kind of plausibility behind the payments though. I might want a selfie with POTUS for bragging rights, and I'm rich, but I don't own a business that could reasonably have Hunter consult for. So, I buy his artwork instead, and eventually I get invited to a dinner that Joe happens to be at.
    - throwawaylinux 4y ago
      My point is, why does there need to be any air of legitimacy? Those "business" dealings in Ukraine and China etc are already blatantly corrupt bribery schemes to buy political favors as it is. Deniability is already pretty far fetched, so paying a bit more is hardly going to change that.
- johnnymorgan 4y ago
  Yeah, that's the tax fraud part. Let me buy this painting @ $500k and then donate it with a value of $1m, net $500k tax rebate. So much of it is just shady shit using Art as a store of value.
  - hpkuarg 4y ago
    That's not how it works! You can't just make up a valuation when you donate things, and whatever higher valuation you get, you have now incurred capital gains on which you must pay taxes.
    - brippalcharrid 4y ago
      This article seems to be suggesting in Scenario 5 that under certain circumstances a person (in the US) can receive the full (appraised) market value of a donated art work as a tax deduction: https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=2027&context=umcur https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=202... (There's a great deal of art and artifacts in museums and galleries around the world that have been donated "in lieu of taxation") It also talks about how prices for art can be driven by a cycle of especially wealthy people being willing to pay large amounts of money for art. > Because each donated work of art has a subjective value that is assessed by an appraiser and then after a period can be put back into the art market by the museum, art can be caught in a cycle of continuous increasing value, moving between private ownership and museums. When you take into consideration the exclusivity of the market and socio-economic factors that make the market highly responsive to high social standing and influence, which encourages selling art to the most high standing individuals and close business associates, we can see several financial and social results. First, we see that charitable deductions taken from art donations disproportionally benefit the wealthy while providing a benefit of subjective value to the receiving organization. And that fact that people can donate their art to their own private museums (on their own property), with public access available at certain times of the year, by appointment.

tenpies 4y ago

Don't forget bribery. After all, Hunter Biden's paintings netted up to ~$500,000 a piece and I can only imagine how good the return on investment was.

throwawaylinux 4y ago
I don't see what they're trying to hide though, they're paid millions of dollars for "consulting" services. It's not like anything is going to happen to them if they just get more. Why bother doing the art and book deals and things? Or is it to inflate the ego of the ones who actually believe they're talented and interesting?
- googlryas 4y ago
  You need some kind of plausibility behind the payments though. I might want a selfie with POTUS for bragging rights, and I'm rich, but I don't own a business that could reasonably have Hunter consult for. So, I buy his artwork instead, and eventually I get invited to a dinner that Joe happens to be at.
  - throwawaylinux 4y ago
    My point is, why does there need to be any air of legitimacy? Those "business" dealings in Ukraine and China etc are already blatantly corrupt bribery schemes to buy political favors as it is. Deniability is already pretty far fetched, so paying a bit more is hardly going to change that.
johnnymorgan 4y ago
Yeah, that's the tax fraud part. Let me buy this painting @ $500k and then donate it with a value of $1m, net $500k tax rebate. So much of it is just shady shit using Art as a store of value.
- hpkuarg 4y ago
  That's not how it works! You can't just make up a valuation when you donate things, and whatever higher valuation you get, you have now incurred capital gains on which you must pay taxes.
  - brippalcharrid 4y ago
    This article seems to be suggesting in Scenario 5 that under certain circumstances a person (in the US) can receive the full (appraised) market value of a donated art work as a tax deduction: https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=2027&context=umcur https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=202... (There's a great deal of art and artifacts in museums and galleries around the world that have been donated "in lieu of taxation") It also talks about how prices for art can be driven by a cycle of especially wealthy people being willing to pay large amounts of money for art. > Because each donated work of art has a subjective value that is assessed by an appraiser and then after a period can be put back into the art market by the museum, art can be caught in a cycle of continuous increasing value, moving between private ownership and museums. When you take into consideration the exclusivity of the market and socio-economic factors that make the market highly responsive to high social standing and influence, which encourages selling art to the most high standing individuals and close business associates, we can see several financial and social results. First, we see that charitable deductions taken from art donations disproportionally benefit the wealthy while providing a benefit of subjective value to the receiving organization. And that fact that people can donate their art to their own private museums (on their own property), with public access available at certain times of the year, by appointment.