The art market owes much of its success to tax policy. A new essay in the Columbia Journal of Law & the Arts examines many of the financial structures used by Pop Art gallerist Leo Castelli in the middle of the 20th Century. The Essay is authored by Michael W. Maizels (visiting researcher at the Harvard metaLAB) and William E. Foster (Associate Dean for Academic Affairs at Arkansas School of Law)
This essay focuses on the efforts of an enterprising art gallerist, Leo Castelli, to aggressively promote his stable of Pop artists through the development of several financial structures, including some designed to leverage the relatively generous income tax deductions and anemic enforcement regime of the time. In doing so, Castelli not only seeded the ground for the international ascendance of American visual art, but also engineered financial arrangements that fostered the development of a lucrative and resilient art market that endures to this day. With the aim to provide insights into both the legal-political and the art historical registers, this essay describes a tax law framework that provides a key piece missing from the art historical puzzle.
“The Revolution (Mural)” by David Alfaro Siqueiros
Julia L.M. Bogdanovich, a senior editor of thePennsylvania Law Review has authored an interesting comment examining how artists could pay taxes with in-kind payment. She uses a comparative approach highlighting both Mexico and the United Kingdom. From the Introduction:
According to popular accounts, in 1957 David Alfaro Siqueiros marched into Hugo B. Margáin’s office with a radical and risky proposal. There, the famous muralist bluntly told the new Director of Income Tax that the recent income tax reforms were unduly burdening Mexico’s artists because they “did not know about accounting or tax laws” and had no money with which to pay their obligations. “The only thing we have are paintings,” Siqueiros insisted. However, rather than seek a complete tax exemption for artists, he told Margáin that artists could instead pay taxes with their artwork. Because their art was valuable, Mexico could amass an enviable collection. Tasked with ensuring the success of the new tax system,8 perhaps Margáin was inclined to be creative, or perhaps he was an art aficionado. Regardless of his motives, Margáin replied, “It doesn’t seem like a bad idea.” Under Margáin’s leadership, the Mexican Ministry of Finance and Public Credit accepted Siqueiros’ proposal and launched a program called Pago en Especie (Payment in Kind) in November 1957, when it collected its first income tax payment in art.
A joint Swiss and Italian investigation has resulted in a seizure of this portrait, which may be a work by Leonardo da Vinci. Whether the work is, in fact, a recently surfaced work by the Renaissance master is very much in doubt. Some have tried to attribute the work to him the Telegraph reports:
Carbon dating has shown that there is a 95 per cent probability that the portrait was painted between 1460 and 1650, and tests have shown that the primer used to treat the canvas corresponds to that employed by the Renaissance genius.
Carlo Pedretti, a professor emeritus of art history and an expert in Leonardo studies at the University of California, Los Angeles, said the tests showed there were “no doubts” that the portrait was the work of Leonardo.
However Martin Kemp, professor emeritus of the history of art at Trinity College, Oxford, and one of the world’s foremost experts on the artist, has expressed doubts about whether the painting, which measures 24in by 18in, is the work of Leonardo.