Tax Policy Toward Art Museums
AbstractAlthough art museums do not pay any substantial taxes, they are greatly affected by various U.S. tax rules. The individual receives a deduction for donations of art to museums, the estate gets a deduction for bequests, and the corporation gets a deduction for charitable gifts. Art museums also are not taxed on investment income or on some "related" business activities. This paper reviews the logic for these rules and discusses their economic effects. In combination, this set of tax provisions is found to have a tax expenditure that is larger than direct federal expenditures on art museums in the U.S. The amount of this tax expenditure or implicit subsidy has been falling in recent years because of reductions in the marginal personal income tax rates at which individuals deduct gifts. High income taxpayers are found to be the most responsive to marginal tax rates, and they also tend to give the largest amounts to the arts. Therefore the level of the top personal marginal tax rate is particularly important to art museums. Simulations here suggest that the personal marginal rate reduction in the Tax Reform Act of 1986 could reduce gifts to the arts by as much as 24 percent.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3379.
Date of creation: Jun 1990
Date of revision:
Publication status: published as The Economics of Art Museums, ed. M. Feldstien. Chicago: The University of Chicago Press, 1991, pp. 195-235.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Clotfelter, Charles T., 1980. "Tax incentives and charitable giving: evidence from a panel of taxpayers," Journal of Public Economics, Elsevier, Elsevier, vol. 13(3), pages 319-340, June.
- Boskin, Michael J., 1976. "Estate taxation and charitable bequests," Journal of Public Economics, Elsevier, Elsevier, vol. 5(1-2), pages 27-56.
- Joel Slemrod, 1988.
"Are Estimated Tax Elasticities Really Just Tax Evasion Elasticities? The Case of Charitable Contributions,"
NBER Working Papers
2733, National Bureau of Economic Research, Inc.
- Slemrod, Joel, 1989. "Are Estimated Tax Elasticities Really Just Tax Evasion Elasticities? The Case of Charitable Contributions," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 517-22, August.
- Ralph L. Nelson, 1970. "Economic Factors in the Growth of Corporation Giving," NBER Books, National Bureau of Economic Research, Inc, number nels70-1.
- B. Douglas Bernheim, 1987.
"Does the Estate Tax Raise Revenue?,"
in: Tax Policy and the Economy, Volume 1, pages 113-138
National Bureau of Economic Research, Inc.
- Feldstein, Martin S & Taylor, Amy, 1976. "The Income Tax and Charitable Contributions," Econometrica, Econometric Society, Econometric Society, vol. 44(6), pages 1201-22, November.
- R. A. Schwartz, 1968. "Corporate Philanthropic Contributions," Journal of Finance, American Finance Association, American Finance Association, vol. 23(3), pages 479-497, 06.
- Clotfelter, Charles T, 1980. "Tax Incentives and Charitable Giving: Evidence from a Panel of Taxpayers," Empirical Economics, Springer, Springer, vol. 13(3), pages 319-40, June.
- Reece, William S, 1979. "Charitable Contributions: New Evidence on Household Behavior," American Economic Review, American Economic Association, American Economic Association, vol. 69(1), pages 142-51, March.
- Charles T. Clotfelter, 1990. "The Impact of Tax Reform on Charitable Giving: A 1989 Perspective," NBER Working Papers 3273, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.