Subsidizing the Arts

| Fri Feb. 11, 2011 11:33 AM EST

Conservatives want to slash federal arts subsidies and NPR funding, but Matt Yglesias points out that these costs are probably peanuts compared to the federal boost to the arts from the tax code:

I don’t know which way this cuts, but it’s worth pointing out that for all the sporadic hubub over the NEA, by far the biggest federal subsidy to the arts comes in the form of the federal income tax deduction for charitable contributions [amounting to about $50 billion per year]. This costs a ton of money, a lot of charitable donations go directly to the arts (museums, ballets, opera, etc.) and another large chunk goes to universities that, in turn, spend money on the arts. The huge advantage of subsidizing the arts this way is it lets you hide the ball. You never hear people getting mad over the fact that tax-exempt contributions are going to fund controversial or offensive art. It’s a pretty good model, and yet nobody ever talks about it, in part because it works precisely through the mechanism of people not talking about it.

I think this partly misses the point. Sure, one of the reasons conservatives are OK with this is because it's a tax break, but they're also OK with it because it fundamentally leaves the choice of what art to subsidize in private hands. There's no sense in which a federal bureaucrat is choosing which art to fund and there's no sense in which the federal government is actively approving or disapproving of certain kinds of art.

For what it's worth, I'd actually be happy to get rid of both the tax deduction for charitable contributions and federal subsidies for the arts. On the former, an awful lot of charitable contributions seem to me like "charity" only in the most technical sense, and I don't especially see why you should get a tax break for, say, contributing money to your own church or giving money to your alma mater for a new basketball arena to be named after you. Besides, I suspect that if this tax break were done away with, we'd reach a new equilibrium fairly quickly in which charitable donations weren't affected very much.

As for direct federal subsidies to the arts, I agree with Jon Chait that there really isn't much of a market breakdown here: the current market for art, broadcasting, and entertainment seems pretty robust to me without government help. The United States isn't the Florence of the Medicis, after all. I'm going to annoy my sister for repeating this, but direct spending on the arts is mostly a subsidy to the upper middle class and CPB funding is mainly a way for the upper middle class to avoid the indignity of having to listen to ads. I'm not sure that's a group that really needs this special treatment. The money could be better spent elsewhere.

But I should add that I'm pretty open to argument on both these points. These aren't deeply held sentiments or anything.