12 ms·

Writing Off the Warhol Next Door

70 points by achariam 12y ago

discardorama 12y ago
Simple fix? Restrict the tax writeoff to $100/visitor/year.
- arjunnarayan 12y ago
  That's a surprisingly simple fix that makes a lot of sense. There's clearly a public benefit to having more visitors (since the tax break is explicitly to encourage things that are of the public benefit). I like it.
- 2arrs2ells 12y ago
  Startup idea: Fake museum visitors at $10/pop!
  - sitkack 12y ago
    Impressions! Virtual visitors.
- rdtsc 12y ago
  To write off $1M you'd need 10000 visitors/year. Contract a startup that gathers & shuttles fake visitors in at 1000/day for 10 days a year.
  - zorpner 12y ago
    Do a Fermi estimate on the cost of that service.
  - sogen 12y ago
    Startup? They are called Lawyers
- rbcgerard 12y ago
  unintended consequence: important works are only sent to the largest museums in the largest cities where traffic flow can support it the tax write off.
  - lhc- 12y ago
    So, the most important works end up going where they are seen by the most people? I think that's a reasonable consequence. Much better than hiding them away on some billionaire's private property.
    - rbcgerard 12y ago
      First, I'm not saying there is a right answer. Second, I'm only trying to point out that often seemingly simple solutions have unintended consequences. In this case the further concentration of art in the largest metropolitan areas. I think one could make a reasonable argument that major metropolitan cities already have a high per capita art quotient - and that there is a public good in ensuring people in Topeka and Wichita can see great art as well. I guess I'm really just asking the question - "Do we want to create a situation where art does not get donated to small museums in order to spite a couple of billionaires?"
deleted 12y ago
[deleted]
- deleted 12y ago
  [deleted]
fiatmoney 12y ago
Here's a neat trick: - Buy Painting X1, X2, X3, ... for 10K apiece. - Your friend buys Painting Y1, Y2, Y3, ... for 10K apiece. - You buy one of your friend's paintings for 1M. He does the same. - Holy cow! "Market price" for the rest of your paintings is now 100x greater than it was yesterday. - "Donate" as many of the paintings as you wish to the museum next door. Deduct the full value (now 1M) on your taxes.
- iolothebard 12y ago
  You should see the Romney Family's IRAs. 30k/year somehow has magically grown to 87 million. Nice eh?
  - fiatmoney 12y ago
    Yeah, it's amazing what you can do when you're able to arbitrarily declare the "market value" of the stock you're putting in your IRA.
    - winstonsmith 12y ago
      In case anyone doesn't know what you're talking about: http://www.gao.gov/products/GAO-15-16 http://www.gao.gov/products/GAO-15-16 A small number of taxpayers has accumulated larger IRA balances, likely by investing in assets unavailable to most investors—initially valued very low and offering disproportionately high potential investment returns if successful. Individuals who invest in these assets using certain types of IRAs can escape taxation on investment gains. For example, founders of companies who use IRAs to invest in nonpublicly traded shares of their newly formed companies can realize many millions of dollars in tax-favored gains on their investment if the company is successful. With no total limit on IRA accumulations, the government forgoes millions in tax revenue. The accumulation of these large IRA balances by a small number of investors stands in contrast to Congress's aim to prevent the tax-favored accumulation of balances exceeding what is needed for retirement.
    - charlesdm 12y ago
      Doesn't he have a permanent profit share in the Bain funds? Bain is one of the more successful private equity funds in the world, and as such, I'd think that 'stake' could easily be valued at 10-20x earnings.
im2w1l 12y ago
In what way are paintings educational? Don't get me wrong I like looking at them, but I can't say I have learned any transferable skills, or that they've made me a better person or anything like that.
- lbotos 12y ago
  Depends on "what" you are being educated. If you are a designer, painting can be very educational as they contain: - Line - Color - Form - Space Studying the use of these elements can make you a better designer for sure. If you are a film maker, you make study an artist's use of color (Monet, Mondrian) to get inspired for your color palette. You are right that studying paintings won't magically make you a better person or make you a better at basketball but in the realm of creation, studying paintings are definitely valuable.
- mathattack 12y ago
  Inspiration? http://www.washingtonpost.com/blogs/comic-riffs/post/steve-jobs-his-10-best-quotes-about-art-and-creativity/2011/10/06/gIQAc0ZARL_blog.html http://www.washingtonpost.com/blogs/comic-riffs/post/steve-j... That said, I'm not a fan of tax incentives for art from a government that's borrowing money, as one definition of art is that which has no function.
- matt4077 12y ago
  Education isn't just about "transferrable skills", at least not in the sense that you can attach a $ value for it. Society is advanced by two broad categories: science & technology, and arts & culture. To deny the benefit society reaps from a culturally educated population is insane.
  - deleted 12y ago
    [deleted]
- gallerytungsten 12y ago
  Have you ever tried to copy a painting? Try it sometime, you'll learn a lot.
- 12y ago
hristov 12y ago
Somebody should start a website that catalogs all of these museums. Then we the unwashed masses should all visit them. Then we will all find out whether these are actual museums or just tax avoidance schemes.
borkt 12y ago
http://www.pier24.org http://www.pier24.org Great Photography collection in SF that meets this criteria it seems. Definitely worth a visit.
bootload 12y ago
"... Wealthy collectors, of course, have long saved millions of dollars in federal taxes by donating art and money to museums and foundations. But what distinguishes Mr. Brant’s center and a growing number of private tax-exempt exhibition spaces like it is that their founders can deduct the full market value of any art, cash and stocks they donate, even when the museums are just a quick stroll from their living rooms. ..." Sounds suspiciously like money laundering. You don't think all that expensive Art, is really worth that amount do you?

70 points by achariam 12y ago

discardorama 12y ago

Simple fix? Restrict the tax writeoff to $100/visitor/year.

arjunnarayan 12y ago
That's a surprisingly simple fix that makes a lot of sense. There's clearly a public benefit to having more visitors (since the tax break is explicitly to encourage things that are of the public benefit). I like it.
2arrs2ells 12y ago
Startup idea: Fake museum visitors at $10/pop!
- sitkack 12y ago
  Impressions! Virtual visitors.
rdtsc 12y ago
To write off $1M you'd need 10000 visitors/year. Contract a startup that gathers & shuttles fake visitors in at 1000/day for 10 days a year.
- zorpner 12y ago
  Do a Fermi estimate on the cost of that service.
- sogen 12y ago
  Startup? They are called Lawyers
rbcgerard 12y ago
unintended consequence: important works are only sent to the largest museums in the largest cities where traffic flow can support it the tax write off.
- lhc- 12y ago
  So, the most important works end up going where they are seen by the most people? I think that's a reasonable consequence. Much better than hiding them away on some billionaire's private property.
  - rbcgerard 12y ago
    First, I'm not saying there is a right answer. Second, I'm only trying to point out that often seemingly simple solutions have unintended consequences. In this case the further concentration of art in the largest metropolitan areas. I think one could make a reasonable argument that major metropolitan cities already have a high per capita art quotient - and that there is a public good in ensuring people in Topeka and Wichita can see great art as well. I guess I'm really just asking the question - "Do we want to create a situation where art does not get donated to small museums in order to spite a couple of billionaires?"

deleted 12y ago

[deleted]

deleted 12y ago
[deleted]

fiatmoney 12y ago

Here's a neat trick: - Buy Painting X1, X2, X3, ... for 10K apiece. - Your friend buys Painting Y1, Y2, Y3, ... for 10K apiece. - You buy one of your friend's paintings for 1M. He does the same. - Holy cow! "Market price" for the rest of your paintings is now 100x greater than it was yesterday. - "Donate" as many of the paintings as you wish to the museum next door. Deduct the full value (now 1M) on your taxes.

iolothebard 12y ago
You should see the Romney Family's IRAs. 30k/year somehow has magically grown to 87 million. Nice eh?
- fiatmoney 12y ago
  Yeah, it's amazing what you can do when you're able to arbitrarily declare the "market value" of the stock you're putting in your IRA.
  - winstonsmith 12y ago
    In case anyone doesn't know what you're talking about: http://www.gao.gov/products/GAO-15-16 http://www.gao.gov/products/GAO-15-16 A small number of taxpayers has accumulated larger IRA balances, likely by investing in assets unavailable to most investors—initially valued very low and offering disproportionately high potential investment returns if successful. Individuals who invest in these assets using certain types of IRAs can escape taxation on investment gains. For example, founders of companies who use IRAs to invest in nonpublicly traded shares of their newly formed companies can realize many millions of dollars in tax-favored gains on their investment if the company is successful. With no total limit on IRA accumulations, the government forgoes millions in tax revenue. The accumulation of these large IRA balances by a small number of investors stands in contrast to Congress's aim to prevent the tax-favored accumulation of balances exceeding what is needed for retirement.
  - charlesdm 12y ago
    Doesn't he have a permanent profit share in the Bain funds? Bain is one of the more successful private equity funds in the world, and as such, I'd think that 'stake' could easily be valued at 10-20x earnings.

im2w1l 12y ago

In what way are paintings educational? Don't get me wrong I like looking at them, but I can't say I have learned any transferable skills, or that they've made me a better person or anything like that.

lbotos 12y ago
Depends on "what" you are being educated. If you are a designer, painting can be very educational as they contain: - Line - Color - Form - Space Studying the use of these elements can make you a better designer for sure. If you are a film maker, you make study an artist's use of color (Monet, Mondrian) to get inspired for your color palette. You are right that studying paintings won't magically make you a better person or make you a better at basketball but in the realm of creation, studying paintings are definitely valuable.
mathattack 12y ago
Inspiration? http://www.washingtonpost.com/blogs/comic-riffs/post/steve-jobs-his-10-best-quotes-about-art-and-creativity/2011/10/06/gIQAc0ZARL_blog.html http://www.washingtonpost.com/blogs/comic-riffs/post/steve-j... That said, I'm not a fan of tax incentives for art from a government that's borrowing money, as one definition of art is that which has no function.
matt4077 12y ago
Education isn't just about "transferrable skills", at least not in the sense that you can attach a $ value for it. Society is advanced by two broad categories: science & technology, and arts & culture. To deny the benefit society reaps from a culturally educated population is insane.
- deleted 12y ago
  [deleted]
gallerytungsten 12y ago
Have you ever tried to copy a painting? Try it sometime, you'll learn a lot.
12y ago

hristov 12y ago

Somebody should start a website that catalogs all of these museums. Then we the unwashed masses should all visit them. Then we will all find out whether these are actual museums or just tax avoidance schemes.

borkt 12y ago

http://www.pier24.org http://www.pier24.org Great Photography collection in SF that meets this criteria it seems. Definitely worth a visit.

bootload 12y ago

"... Wealthy collectors, of course, have long saved millions of dollars in federal taxes by donating art and money to museums and foundations. But what distinguishes Mr. Brant’s center and a growing number of private tax-exempt exhibition spaces like it is that their founders can deduct the full market value of any art, cash and stocks they donate, even when the museums are just a quick stroll from their living rooms. ..." Sounds suspiciously like money laundering. You don't think all that expensive Art, is really worth that amount do you?