I don't know accounting, but I know what I like

May 25, 2017 8:13 AM

The Mexican Pago en Especie program allows artists to pay their taxes with art instead of money. It started informally in the 1950s and was codified in the 1970s. The program includes a jury system to ensure that the country is getting a good value and has amassed a collection of more than 7,000 pieces of art. It even survived a recent bout of tax reform.
posted by Etrigan (19 comments total)

This is a really brilliant idea, actually. I love it.
posted by tobascodagama at 8:39 AM on May 25, 2017 [2 favorites]

Canada has a pretty major art collection that it loans out via the Canada Council for the Arts. They lend to museums for exhibit, use to decorate government offices or rent out pieces to corporate clients.

This would be a cool way to expand that collection.
posted by jacquilynne at 8:48 AM on May 25, 2017 [4 favorites]

Never going to happen in the US, at least beyond an incredibly limited scale. One of the many things that keeps the dollar valuable is that it is the only store of value accepted for tax payments. If Congress were less stupid, it would be absolutely essential that tax be collected only in dollars, since that would provide absolute control over inflation.
posted by wierdo at 10:18 AM on May 25, 2017 [1 favorite]

Arguably, Mexico produces better art than the US. Pretty sure even the 'bad' stuff is good value.
posted by Katjusa Roquette at 10:31 AM on May 25, 2017

The article says the U.K. does something similar, only it's artifacts of national importance. Usually it's used to discharge inheritance tax.
posted by Katjusa Roquette at 10:37 AM on May 25, 2017 [1 favorite]

Never going to happen in the US, at least beyond an incredibly limited scale.

A program that has garnered 7000 works of art over years from the entire population of Mexico is incredibly limited in its scale.

One of the many things that keeps the dollar valuable is that it is the only store of value accepted for tax payments. If Congress were less stupid, it would be absolutely essential that tax be collected only in dollars, since that would provide absolute control over inflation.

This is probably pretty off-topic for this thread, but can you explain this further? I don't really understand the connection between what currency taxes are collected in and inflation.
posted by jacquilynne at 10:41 AM on May 25, 2017 [2 favorites]

The article says the U.K. does something similar, only it's artifacts of national importance. Usually it's used to discharge inheritance tax.

The difference is that the UK's program isn't necessarily about artists paying with their art. It's just "I owe $X and I have this old painting that my grandfather bought that my appraiser says is worth $X. Here you go."
posted by Etrigan at 10:59 AM on May 25, 2017 [2 favorites]

One of the many things that keeps the dollar valuable is that it is the only store of value accepted for tax payments. If Congress were less stupid, it would be absolutely essential that tax be collected only in dollars, since that would provide absolute control over inflation.

You're going to have to walk me through what the stability of the dollar has to do with how your taxes are paid, much less how that gives you control over inflation in a transnational-capital context, because I'm reasonably confident both of those assertions are false.

Letting people work off their debts is a totally reasonable way to settle accounts owed, provide the process is humane, and art is the work product of an artist.
posted by mhoye at 11:51 AM on May 25, 2017

Man, I've always been proud of Seattle's public art program, but this seems even better. Talk about getting the public involved. I would love to see a program modeled on this idea introduced alongside our already existing program.
posted by los pantalones del muerte at 11:52 AM on May 25, 2017

But is it tax?
posted by Kabanos at 12:02 PM on May 25, 2017 [7 favorites]

I don't really understand the connection between what currency taxes are collected in and inflation.

The most recent thread on Modern Monetary Theory covers this in more detail, but the basic idea is that the "value" of the US Dollar, or any other reserve currency, is governed by supply and demand.

The US Government, in this case, spends dollars but also prints them (literally and virtually). Any time the Government spends dollars, it is releasing new supply into circulation. Taxation takes dollars out of circulation, thereby reducing the supply side of the value equation. The reason that balancing the national budget (i.e., matching the amount of dollars collected as taxes with the amount created by spending) is good is that it keeps inflation down by preventing the supply of dollars from increasing beyond the amount of growth in the economy as measured by other means.

(Many MMT advocates then go further by pointing out that, at times when inflation is at reasonable levels, it's perfectly fine to outspend tax income, as long as you don't rely on it too much and as long as whatever you spend it on grows the economy enough to offset the additional supply of money.)

So, the objection would be that allowing payment-in-kind to supplant currency-based payment of taxes fails unbalances the monetary supply of dollars in an inflationary direction.

However, given that we're specifically talking about artists here, I highly doubt the imbalance would register as more than a few molecules of a drop in a bucket.
posted by tobascodagama at 12:06 PM on May 25, 2017 [2 favorites]

Seems gimmicky: economically, it shouldn't be any different than an artist creating an additional piece and selling it to cover the tax on profit for the year. The primary difference is that they're essentially able to deduct the fair value of the final piece; otherwise the payment-in-kind would have to be grossed up for the tax liability associated with the constructive sale of the final artwork (using property to satisfy a liability is taxed as a sale in most jurisdictions).
posted by jpe at 1:01 PM on May 25, 2017

(The monetary policy stuff is a huge derail. Never mind that what's being described is fiscal policy--there's a difference--but the artist tax base is so incredibly small as to make no difference to monetary policy. Even if a large fraction of taxes were paid in-kind, the Fed has powerful tools to contract the money supply independent of fiscal policy. Also, I assume the value of in-kind payments is denominated in dollars anyway--I'd wager this reduces or eliminates any monetary effect.)
posted by lozierj at 1:22 PM on May 25, 2017 [2 favorites]

Just to give an idea of the scale of this in Mexico, this is the number of works of art received each year:

2008: 975
2009: 1,209
2010: 876
2011: 1,085
2013: ~440

It costs the govt. around ~10 million USD a year to store, exhibit and insure the collection. The works by Rivera, Siqueiros, etc... could go for many millions at auction, but there is no way the newer pieces are all worth > 10,000 USD.

But this is not about money.

It is a way to keep artists out of jail and producing more culture. It is a way of maximizing the benefits to the greatest number of Mexicans.

I love the fact that the works are sent to small municipalities, to be exhibited in government buildings, libraries and other public spaces. Most of the best art by the best Mexican artists is in private collections or overseas museums and galleries. This program is the only chance millions of people will have to experience their own cultural heritage.

(BTW, the original proposal was created by two women, Inés Amor and Carmen Marín. Of course it got no traction until two men presented it, David Alfaro Siqueiros and Gerardo "Dr. Atl" Murillo. The linked articles credits the idea to Siqueiros and Murillo)
posted by Dr. Curare at 3:45 PM on May 25, 2017 [9 favorites]

I like the idea, even though it seems that only a small number of artists benefit.
posted by NotSam at 7:44 AM on May 26, 2017

A small number of artists and a huge number of Mexicans who get access to the art.
posted by Dr. Curare at 8:21 AM on May 26, 2017 [2 favorites]

The article says the U.K. does something similar

Doesn't work in Australia.
posted by flabdablet at 9:25 AM on May 26, 2017

Kinda brings to mind the scene from "Big Night" where the artist is paying for his meal with some paintings ...
posted by MILNEWSca at 11:49 AM on May 26, 2017

Also, Ed Kienholz's Watercolors:

As he liked to tell the story, the assemblage artist Ed Kienholz was repairing a rifle back in 1969 when he found he needed a different-size screwdriver to finish the job. Rather optimistically, the California artist painted an abstract watercolor and stamped the words FOR TEN SCREWDRIVERS across it in black. Within a week, a neighbor had spotted the picture at Kienholz’s house and offered to make the exchange. Thus began the artist’s groundbreaking, but to this day critically undervalued, series of watercolor trades.

He continued the series for years, creating paintings stamped with FOR A 4-WHEEL-DRIVE DATSUN JEEP when he needed a car or with FOR 2 GOOD MOUNTAIN HORSES to obtain four-legged transport. He painted for a haircut when he was getting shaggy and for a fur coat to get a shaggy garment, presumably to give away. Each has a colored background and bears the artist’s signature and thumbprint in the corner.

"There were so many trades, it’s hard to remember them all," says his widow, the artist Nancy Kienholz. "He traded these watercolors for a sauna, for a gun, for a mattress and box spring, for ‘a new Nikon for Nancy.’ And he’d trade anything — property, cars. He traded guns with the milkmen to get milk. He loved the game of it. He was the king of bartering."

My personal favourites include For A CRAFTSMAN CHAINSAW and any that are just a straight up dollar amount: e.g. For $25.00.
posted by zamboni at 9:06 AM on June 8, 2017 [2 favorites]