Leahy Pushes, Again, for Artists' Tax Break Sen. Pat Leahy (D-VT) is sponsoring the Artist-Museum Partnership Act, which would allow artists to file tax deductions for the market value of works they donate to nonprofit organizations. As Leahy tells Robert Siegel, artists are currently able to deduct only the value of the materials used. The measure has passed the Senate in recent years, but it still hasn't become law.
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Leahy Pushes, Again, for Artists' Tax Break

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Leahy Pushes, Again, for Artists' Tax Break

Leahy Pushes, Again, for Artists' Tax Break

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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.


And I'm Robert Siegel.

There is no greater value added than the creativity of a great artist. Take the price of paint, canvas and brushes and call that the value of a painting, and to then assume that the brushes, paint and canvas were brought together by Monet. Suddenly, ingredients worthy of a modest shopping list turned into something that collectors will bid millions for and cat burglars would even risk their lives for it.

Well, this rumination on the financial multiplier effect of art is occasioned by a tax bill. It was introduced in the U.S. Senate; it's called an Artist's Fair-Market Value Deduction Bill. It changes the way an artist can claim a tax deduction for making a charitable gift of his or her own creative work. One of the lead sponsors is Senator Patrick Leahy of Vermont.

Welcome to the program once again, Senator Leahy.

Senator PATRICK LEAHY (Democrat, Vermont): Thank you. It's good to be with you.

SIEGEL: And let's start with the way that the IRS currently treats a donated artwork. It could be, I gather, an author's manuscript, but let's take a painted wood carving, I've made one, I'm the artist, I give it to a local museum.

Sen. LEAHY: And if you did, you could deduct the cost of the wood and the painting. And you could deduct $5, $10, $20, whatever.

SIEGEL: But to clarify this - if I, as the artist in my hypothetical wood carving - if I sold that to a collector for $100,000 and the collector then donated it to the museum…

Sen. LEAHY: Oh, the collector - he could deduct $100,000, I mean, that's the irony of the whole thing. If you made a piece of art that cost you $20 in material, you donate it to museum. You get the $20. You sold it for $100,000 to somebody, they in turn or their estate gives it to the museum, they deduct the $100,000. It just doesn't seem to make a great deal of sense.

We had back a few years ago that Igor Stravinsky wanted to donate all of his papers to the Library of Congress. He could take the cost of whatever, that amount in paper would have cost and says he sold it in Switzerland, Americans never got that chance to have that.

SIEGEL: You mean, the IRS…

Sen. LEAHY: There are so many…

SIEGEL: The IRS says its literally worth the paper that it's written on with the ink thrown in.

Sen. LEAHY: That's about it.

SIEGEL: But let me ask you a couple of questions about this. First, let's assume that I'm a painter and when I do sell paintings, they sell for $15,000 typically. But, I don't always sell paintings, I have others that don't move, I donate a painting not to the Met or the Smithsonian or the National Gallery but I donated it to the local Pottersville Museum of Art. Who says, who determines whether that, say, piece of art worth the deduction of $15,000 or whether it's one of my dogs that doesn't - that doesn't sell and I don't deserve any of deduction for it?

(Soundbite of laughter)

Sen. LEAHY: We have very, very strong standards about what can be taken, what cannot. In fact, you have to provide for appraisals by qualified appraisers. In fact, if there is a question, it can go to review. The Internal Revenue Service actually has an art advisory panel. Now, these are people who are not about to give away the shop.

SIEGEL: Now, when the current or when the 1969 tax law took effect and changed the rule governing donations, President Richard Nixon famously and criminally had a deed of the gift of his papers backdated to take advantage of the old law. Politicians had taken advantage of the tax deduction for the gift of their papers as estimated by an independent appraiser. Is it conceivable that any of the people who might vote on this provision, in either the Senate or the House, by virtue of books that they've written or just their status might someday take advantage of this very provision?

Sen. LEAHY: Well, a number of the things that members of Congress own now have value. They could sell and they could donate them anyway. But it is not intended for that - this is intended for artists. I don't think you're going to find any benefit going to a member of Congress that they would not have available to them anyway. Certainly, if you have a bestselling author in the Congress, they're going to make a lot of money but I must point out that there've been darn few bestselling authors and…

SIEGEL: I think, two of them are running for president right now.

(Soundbite of laughter)

Sen. LEAHY: Two of them are running for president, of course, we're all jealous of them. They've all done - actually three. All three senators who are running for…

SIEGEL: Yes, that's right. All three senators are running. Yes.

Sen. LEAHY: …Senator McCain, Senator Clinton and Senator Obama - they've all been bestselling authors, they've all made a lot of money. And they've also -all three of them given a lot of that money to charity.

SIEGEL: Well, are they artists, as far as the bill is concerned because they've written books?

Sen. LEAHY: Yeah, they are artists. But I think what you're going to see in a case like that - if somebody wants to give proceeds of a book, they're not going to need this.

SIEGEL: Well, as a sponsor of this bill, for you, who is the kind of artist you have most in mind whose situation would be greatly altered by the ability to deduct the fair-market value of the work of art if the artist donates it?

Sen. LEAHY: Well, I can see people in my own state, who have, do a very good job and their paintings, their artwork. We have a lot of contemporary artists in this country who have this artwork, and ultimately the public wins. The public gets to see artwork they might not have seen otherwise, unless they were visiting somebody who's a private collector.

SIEGEL: Well, Senator Leahy. Thank you very much for talking with us about this.

Sen. LEAHY: It's always good to be with you, Robert. Thank you very, very much.

SIEGEL: Yeah. That's Senator Patrick Leahy, Democrat of Vermont and one of the sponsors of the Artist's Fair-Market Value Deduction Bill in the U.S. Senate.

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