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Pros and Cons of Our Taxes Funding the Arts

December 24, 2012

As a proponent of the free market the following article is not going to yield a slam-dunk case for art subsidies. If the free market fails in its production of art, it doesnt automatically follow that the government must influence the menu of available art by funneling money through an agency such as the NEA. I am a supporter of the arts, but I am not a supporter of government funding the arts. The late Ernest van den Haag, psychoanalyst, academic and 1972 Senior Fellow for the National Endowment for the Humanities was correct that the arts give pleasure to some and employment to others. But so does whiskey, a commodity for which few advocate government support.

If the NEA did not exist, the government would still be steering vast amounts of money to the arts. Donations to arts organizations are deductible from federal income taxes. It is consequently less costly, on an after-tax basis, to write a check to the local museum or symphony than would be the case if the deduction didnt exist. By lowering the price of the psychic gratification derived from supporting the arts, the government induces people to buy more of that psychic gratification than they otherwise would.

A tax preference offers the advantage of not compelling people to finance art that they find objectionable or simply uninteresting. It also bypasses the administrative costs of a grant-making apparatus. To be sure, writig the arts into the tax code represents an intervention in the market. But it preserves the market element of leaving the choice in consumers’ hands, instead of making it the object of political horse trading.

Leaving the choices to people who care deeply about art is appropriate in light of the highly subjective nature of artistic tastes. Some music lovers would rather have more chamber music concerts, even at the cost of having fewer organ recitals. Others feel exactly the opposite. The nature of the marketplace is that no individual is likely to be completely satisfied with the programming mix that emerges from audience ticket purchases and tax-benefited private donations. But neither is the government likely to raise the overall level of satisfaction by favoring certain types of musical performances over others.


From → Economics

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