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Will Obama tax hikes for the wealthy boomerang against the arts?

February 1, 2010 |  2:38 pm

Obama22Jan10 Nonprofit arts organizations that count on citizens in the upper income brackets to kick in big donations -- and that would be just about all of them -- may want to put their fundraising efforts on fast-forward this year.

If President Obama has his way, the Chronicle of Philanthropy reported Monday, tax deductions for charitable donations will be capped at 28% starting in 2011 for individuals earning more than $200,000 and joint-filers whose income tops $250,000. The current tax write-off for people in the top bracket is 35%.

So an arts philanthropist donating a $1-million gift to a museum or performance group would get a $350,000 tax break this year, but only $280,000 in 2011.

Besides potentially lessening the tax incentive for the wealthy to give, the president's tax proposal would end tax cuts for wealthy Americans, restoring the top tax bracket to 39.5%, where it stood before 2001 cuts, slated to last 10 years, reduced the top bracket to 35%. That means the wealthiest donors would have a bit less disposable income to contribute to their favorite charities, arts or otherwise. If the very rich decide to put dollars that they otherwise might have given away into a rainy-day fund to pay the taxman, arts groups and other nonprofits could suffer.

Arts groups probably won't be able to look to the National Endowment for the Arts to plug any funding leaks that might result: The president's budget proposal calls for the endowment to get $161.3 million for fiscal 2011, a 3.7% cut from the current $167.5 million. Obama also called for an NEA budget of $161.3 million last year, but Congress kicked in a bit more -- something arts advocates likely will push for again. Obama is proposing identical funding – with an identical cut – for the National Endowment for the Humanities.

-- Mike Boehm


Obama's budget includes $100-billion jobs plan

Photo: President Obama. Credit: Charles Dharapak / Associated Press.

Comments () | Archives (17)

The national budget has to be augmented somehow, and those tax cuts for the wealthiest Americans never should have happened in 2001 in the first place. It was a contributing factor to the downfall of our economy. The entire nation has been issued a wake up call. If arts organizations want to survive, we'd all better start serving our communities with better work that has deeper relevance. Maybe this will actually have the effect of getting new authors work seen and creating producing models that actually allow for affordable tickets. New works, larger audiences? Why not? Or I suppose we could just continue to beg the rich and then placate them with more works that uphold the status quo.

Seeing as the many in the Arts lean liberal, isn't this like shooting his supporters in the foot? Cut spending, and the amount the wealthy has to give, and the incentive to give any of what is left over, to organizations that can fill in the gaps in Govt spending? I can see why he'd propose the first two. But cutting the incentive to help those in need, at a time when so many are in need? Makes one question whether he's a liberal. If you think about it, isn't just Arts Orgs that'll suffer, everyone in the Arts who look to those with disposable income to fund their projects will suffer from the loss. Indie-filmmakers for example

What kind of reporting is this? There's a huge amount of information available on why and how people donate to the arts. It has been gathered over a long period of time, from many sources. It is fascinating and well worth reading. But none of it can be found in this article. Sure, I could include a few links, but that's not my job. I guess it's not the reporter's job either. This is a meaningless piece.

Liberal-schiberal. Its called paying what you owe, balancing the budget. You know, having maxed out the old credit card, one has to get it back in line, however it takes. Now libs often live off their daddies cards, so have no idea of reality. Obama is no liberal, both sides hate him now, he is a pragamatist who wants the best, but of what is. Not some childish fantasy world.

Jon Mitchell said it perfectly. This is not a tax increase, it is going back to what under Clinton got us a nearly balanced budget, and prosperity. Bush not only stole the golden egg, he cooked the damn goose. Even his robbing daddy is dismayed. We havent exatly produced generations of realists. We got fantasy brats, instant gratifcation fools, of left and right. Cutting taxes during war is a huge sin, and never done before in history. Our sons died, mine in the Navy, an Annapolis grad like Carter and McCain. While the rich fiddled, and Rome simmered into flames.

We should have been paying the piper all along, now we gotta deal with the Reaper, we are on the verge of economic death. And libs worry about snot nosed artistes and their partying lifestyles. Artists are workers, we do so alone. Involved in life, not a fashion/artscene. While reactionaries wave the flag and the cross to cover THEIR sins. Both too self-absorbed to see or deal with the truth.

The center must hold.

art collegia delenda est

Hm, Jon, did you miss all of last years LA Times reports, on the LA Arts Orgs that are currently struggling, and or closing as a result of state budget cuts and less disposable income for donations, due to the economy??
I'll tell ya why not. I don't about you, but I've never heard a Non-profit say they'll be cutting ticket prices as a result of a loss in proceeds? The exact opposite happens to make up for the loss in proceeds ...
"Maybe this will actually have the effect of getting new authors work seen"... Again the exact opposite is happening now. How many Indies did you see in the theater last year? Indie Distributors once responsible for the bulk of distributing Indie feature films have shut their doors, as a result hundreds of good Indie films did not and still aren't getting distribution. One film (terry Gilliam's) was bought by Sony Classics out of thousands last year. Sales that did take place on films over 500 Grand, we're for guarantee's well under 6 figures, or no guarantee at all to tiny little mom and pop operations without enough resources (disposable income) to market the films widely enough to bring in a profit for the filmmakers. No sales/ profit, means we can't move forward on the next film, which means less/no hiring. ... Filmmakers are having to look for other means, like diy Distribution, problem is 90% of the filmmakers with completed films, borrowed the financing for the film, and have nothing left for diy distribution, and no disposable income, as it all went into making the film. They're now stuck trying to pay for a loan, without the resources to get their product to market, and they haven't received their Bail-out yet... New Indie's are struggling just to raise the financing for the film itself, now they have to add diy distribution and marketing the their fund raising struggles.. . In the real world, getting new works to the market, to be seen by larger audiences, requires financing that has to come from someone. And I resent the suggestion we beg and placate the rich. We simply pitch our idea, or show them our work, they either share our sentiments and feel strongly enough about our work/idea to take a risk and invest their finances, or they don't! They make a profit, or go down with us, so there isn't any need for begging or placating!
I'm just curious what you think those of us "wealthiest, or rather once wealthiest Americans" do with our personal income when we were making it? We were hire; scenic artists, painters, modelers, sculptors, graphic artists, costumers, etc.. people in almost every field of the arts. Entrepreneurs and most mom and pop small Business Owners, don't see our company finances and personal finances as separate from each other, like you and the Govt does. Small Business and Wealthiest American are the same thing, especially if your a independent contractor. We pool it all together and spend in producing our goods or services! As a direct result of my 2001 personal tax cut, our production crew increased by 13 employees. Would you have rather that money had gone to bail out the inept auto industry, or gotten lost in the corrupt, mismanaged, wasteful bureaucracy of the govt, than paid their salaries?

I would like to pay off the debt, like any honest person would. And private enterprise is no less wasteful than the government. Far more, as they pay themselves and shareholders a huge percentage that would go to the so called service provided. This depression was caused by the LACK of government oversight and taxing, by your precious entrepeneurs and big business alike. Eli Broad, probably one of your benefactors, one of the most rapacious

No, the Bush tax cut was a disaster, Be responsible. I know blasphemy amongst both left and right. The world will never be perfect, nor human beings. Lets just do the best we can, and stop raiding the cookie jar, There arent any left, you ate them all. Cookies made by us, not the rich. We got crumbs, but let them eat cake!

The center must hold.

Lillian Gish is dead. You did, at least, identify your bias as one of the wealthiest Americans. In your condescending missive to me, you neglected to acknowledge that I said "new producing models." It is far too broad a topic to cover in this context. You make cherry-picked, straw-man arguments and have the shrill tone we hear in our partisan congress. For the record, I am a lefty, bleeding heart liberal who has made a meager living in the arts for my entire life and I hold a great deal of regard for our President. Nobody can be all things to all people, in a two party system one can only hope that the compass is pointing in a direction agreeable to your overall interests. In the next life Miss Gish seems tormented by the direction of our government and fearful of being parted from her wealth. It also seems she will use anything, speak for anyone, even artists, to try to back up her claims of doom and gloom for charitable giving based on tax increases that never should have been decreased in the first place.

Lastly, my mother and father raised our family running a "mom & pop." If they ever made more than 250,000 a year I will eat one of my childhood shoes, bought a size and half too large, that had to last me at least 18 months for better or worse.

I'd like to see Congress retain the higher charitable contribution deduction to benefit ALL nonprofits, while still restoring the higher income tax for high-earners. Let them benefit by being charitable.

Need to agree with Donald Frazell about something; Can anyone cite a time in the history of the world when taxes were cut to help pay for a war?

May be off topic but it cries out to be reiterated.

"I would like to pay off the debt, like any honest person would."... Seeing as doing so would benefit us all, there aren't too many who wouldn't. However, like most humane, honest, and non-aggressive people, I don't subscribe to the belief that, an Agency of Force can improve upon what individuals in pursuit of their own welfare can achieve. Naturally I have to oppose all attempts to substitute the Force of Government for your ability to choose what is best for you. There must be far more humane and non-aggressive paths to creating a wealthy and healthy society.

"Far more, as they pay themselves and shareholders a huge percentage that would go to the so called service provided.".... How else does one provide an incentive for them to invest more? A pat on the back? We pay them a large percentage, for believing in our idea enough to risk their earnings helping to grow our business, and so that they'll have more, to put back into our goods and/or service... How is that wasteful, and /or not going back into that service? You must mean all the waste created when they spend the rest else where. like in voluntarily exchange for other goods and services, ( buying tickets to Art shows, theater's, electronics, cars, etc) that also creates jobs and wealth for others?

It's interesting in one sentence you state you believe people using their money to grow their business is wasteful. And Also, blame the lack of tax against my "precious entrepreneurs" for the depression, yet in the next sentence, you contradict your own argument by holding up Eli Broad as an example. (you might wanna Wiki him) You'll have to explain how a man who in addition to being forced to turn over his earnings to over powerful Agency, constantly pumping literally hundreds of millions, of his 2.1 billion in earnings into job creation ventures, advances in medical science, and helping to produce some of the brightest minds in this country, is wasteful and responsible for this depression?? Because I just don't see it. Spending 600 million dollars at Harvard and MIT to find cures for deseases, I totally see the waste. I'm 100% positive if we compared the percentage of Eli Broad spending waste, to that of the governments, Eli would come out miles ahead!

I do understand now why we disagree on the solution to getting us out of this hole, we don't agree on the cause. For me, it's morally wrong to use an Agency of Force to make Eli Broad pay for the decisions this Agency of Force made, to enter into the two Un- necessary wars which squandered this countries much needed resources. You feel it is... Never mind that we had no hand what-so-ever in those decisions. We awoke those mornings to this force telling us we had to, and it was the only way... I'm sorry but there is nothing center or grey area about that, it's just plain wrong.

But it is funny you picked him and mention my being a possible benefactor. I've never personally received funds from him, but my 10 yr. niece who was diagnosed with an the mixed-germ cell brain tumor, and since left us was. He paid the treatment bills for many of the children who received life pro-longing treatment at Childrens Hosp. Boston, from which she lived for 2 happy yrs afterward. The compassionate Agency of Force on the other hand was using it money to later deny this same dying child the opportunity to try an experimental treatment involving Thalidimide, that is saving lives for adults, because it hadn't been tested on children yet...

That $2.1 billion is robbers monies, he built unsustainable housing in areas far away from work, huge beige cheaply built McMansions that cost a fortune to heat and cool, wasting precious fuels and polluting the world. And so worthless they are the ones being foreclosed on the most, not well built older homes like mine. Broad is simply the newest of robber barons, as that of the Gilded Age of a hundred years ago, as is our art the equivalent of that decadent salon. Built for their masters whims and vanity. He is extraordianrily vain, trumpets his gifts constantly, built off others labors, and building Mausoleums to his Greatness.

Your are living in a non paralell universe, all those economic models have been tried, and failed. Dont know where you have been, but reality is paying for what you buy. Not having expensive hobbie's to entertain ones friends, built from cheap labor, as it is supply and demand. And the art schools turn out droves of children every year, so the arts get paid less than other fields. And less skilled workers, God knows, I have been doing it and dealing with them for thirty years. Art is the plaything of the rich, waht of it actualy relates to the lifes of 330 million Americans, or teh rest of the world? No, it is fior teh few, the selfish the myopic and spoiled. Art will return, it hastn been needed for fifty eyars, but is once again. The talented and passionate will return to it, they have been elsewhere for decades. the few exceptiosn proving the rule. More artists now than in the entire history of the world combined, with far less to show for it.

the applied arts are fine, the fine arts, well.
art collegia delenda est

fine art colleges must be destroyed. save the Watts Towers the greatest work of art in the American West, tear down the eggheaded, soft and dorky Ivories.

You did, at least, identify your bias as one of the wealthiest Americans... In the next life Miss Gish seems tormented by the direction of our government and fearful of being parted from her wealth." .... Really? Honey I can't be fearful of being parted with that (wealth) which I do not have. Even though I live in a middle class neighborhood in Valley Village. I USED to be considered one of the "wealthiest Americans"! Until myself, and my colleagues, (also "used to be wealthiest Americans") invested the all of our earnings from our last film, along with savings, (one even took out a 2nd mortgage) into the film I mentioned in the previous post. Only to complete it, and then have the Indie distributor, (PictureHouse) who had agreed to distribute it, shut down by Warner Brothers to cut costs. We did get a distributor, E1 Ent. Ever heard of them? No? Because while they're bigger than some, they're still too small to be able to afford 2 million dollar Indie-Films, and therefore didn't have the capital to give us a guarantee that would even cover deferments. We've received a total of 50,000. I currently have a bank balance of $32.00 and have put my camera up for sale on ebay. Sir.

"you neglected to acknowledge that I said "new producing models." ...nope I was referring to all models. To produce anything, one must have access to capital, which has to come from someone. There are some arts that simply cost what they cost. I'm not interested in making documentary style films or films about teenagers simply running thru the woods, screaming at nothing, or redusing the quailty in our art. In in the "motion picture" arts, and I want moving art on the screen that transport people. VFX artists, and make-up effects artists are expensive, along with the production design, this is where the bulk of our dollars is spent, the hundreds of others hired to make a film also cost money, (we have no power to change union contracts, nor should we unless, we're going to start advocating lesser pay) so do costumes, locations, vehicles, equipment, food, etc... We've already made the switch to Digital camera's, and computers for editing, to reduce costs, Now we're driving the producing cost back up, by replacing the costs those saved with this new low cost distribution model!?? What's left to do but reduce crew and cast pay?

It also seems she will use anything, speak for anyone, even artists, to try to back up her claims of doom and gloom for charitable giving based on tax increases that never should have been decreased in the first place. ...Um, honey I don't have to speak for any artist in indie-films, nor to the doom and gloom for charitable orgs, dude. Read the news more. They are quite loudly saying the same thing themselves!

"Lastly, my mother and father raised our family running a "mom & pop." If they ever made more than 250,000 a year I will eat one of my childhood shoes," ....Um were your parents making films that required them to bring in between 500 grand and 10 mil?? I'm sure they made what they needed to produce the good or service that they were providing. And I'm positive they used everything they made on their children, their childrens future and saving for their retirement, and put the rest in trying to grow their business and they would have used the taxes they were forced to give to the government, to invest in their business and community.. We have to make over 250,000 because that is what's required to produce the Art we produce. You try to assert we aren't mom and pops just because our product is expensive to produce but the only people your hurting by doing so, is the people we can't hire to help us.

Jon, I do apologize for the condescending tone. Really i do, It just angers me to no end, that are people out there, who feel hard working Americans and non-profits orgs dedicated to helping those in need should be forced to pay Bush's decisions to enter into two un-necessary wars which squandered the resources we needed, when the housing market collapsed. It's wrong. I also felt your suggestion that we are begging the rich was insulting. Most artist take pride too much pride in their work to run around this town begging. If someone else loves it enough to back it as well, then we enter a mutual beneficial agreement. To suggest otherwise is degrading to those in our art.

"For the record, I am a lefty, bleeding heart liberal who has made a meager living in the arts for my entire life and I hold a great deal of regard for our President." .... I don't you affection for the president, I just question your demand to use a powerful agency of force to meet your goals. Considering that when help is given through non-profits, approximately 80% of each charitable dollar gets the intended recipient, and only 35% of each tax dollar allocated to social welfare reaches the poor, as most of the money goes to pay the salaries of the social workers, mismanagement, waste. It seems rather cruel to those suffering to advocate the continued use of Government force to help meet their needs. And makes some wonder if their is an alternate agenda. And most true passive "bleeding heart liberals" I know in the arts, neither like, or desire to continue the use of force to help people. It goes against their very nature, and their just as sick of its failures, they just don't know any other way.

Donald, How does, "HOW" he made his money, and who he is, have anything to do with your argument, or my rebuttal? Your argument was NOT about HOW Eli Broad made his 2.1 billion. It was that was private business was no less wasteful than Govt because they pay themselves and shareholders rather putting that money back into the economy, and that entrepreneurs and small business owners should be forced to pay for Bush's wars. And you held Eli Broad up as and example.

I'm aware of how he made is money and he still can't hold a candle to the cruelty of that Agency of force it sounds like you support inflicting on the population. No one said they like Eli Broad, or agree with how he made his money. Simply that the direct investments into community was NOT wasteful, nor did he have anything to do with Bush's squandering of the resources that were needed when the economy took a dive. And the 2.1 billion dollar Eli Broad's, do not make up the majority of small business owners making over 250,000.

"Your are living in a non paralell universe, all those economic models have been tried, and failed. Dont know where you have been, but reality is paying for what you buy." ... Hm, really? Actually "In reality" It works every single day, and would do so on a much larger scale, if individuals weren't forced to substitute an agency of force, over their ability to choose what is best for them. Do you seriously think you know more about what's best for everyone else than they do? Dr Mary Ruwart disproved your assertion that allowing people to choose what is best for them, failed, in her 1st edition of "Healing our World". It became available for download free, when the 2nd edition came out, I hope one day you'll take a look at it.

"Not having expensive hobbie's to entertain ones friends, built from cheap labor, as it is supply and demand..... Um are you saying the handful of Unions that exist for those who work in the Arts to ensure there isn't any "cheap labor" aren't doing their jobs? Happen to miss the writers guild strike? They aren't cheap hon, and they are HIGHLY skilled, and educated in their fields. They have to be, many of them deal chemicals, and equipment that can kill or cause serious injury, to themselves or others.

"Art is the plaything of the rich, waht of it actually relates to the lifes of 330 million Americans, or teh rest of the world?" ... So Jon what ya about this opinion expressed by your partner in agreement?? I'm starting to think you are either your acting like a supporter of the president to leave the perseption that his supporter are soulless cruel robots, or teying to convince me you're a soulless robot. Art is one of the reasons for humanity to exist, personally I feel without it we are all just ANTS. What else is there without it? Football? It stirs the soul, inspires dreams, inspires love, and provides an escape from from the daily grind... Have you seen a film in the last 50 years Donald? Do you own a dvd player or a TV? Considering that those who haven't enjoyed one, or don't have a TV, are a very small number. You'd be wrong about it being just for "the rich, the few, the selfish the myopic and spoiled" So it must do something to enhance their lives! Not to mention it feeds the families of tens of thousands who labor in both the arts and technical trades in LA!

"The talented and passionate will return to it, they have been elsewhere for decades."....um, and how do you propose we continue to feed the thousands in Arts currently receiving unemployment due to lack of production?

Film is almost never art, its entertainment, and at best a short story, never a novel as it is prosaic, not musical and poetic like great visual art is. It is made by skilled craftsmen, usually much more so than the fine artistes churned out by the academic machine these days, so get respect. And few artists or musicians are unionized except for recording, even then no retirement or medical

But is a business, and so should be treated no differently than any other, It no like not enough movies get made each year, seldom five worth seeing. Mostly comedies, Avatar is for kids, and makes money from the same million teenagers seeing it over and over and over...

And if you are raking in over $250k a year, you aint no small business, at least midsized, not everything that isnt a corportation is a big business. You should be taxed the same as everyone else, its afor profit venture.

Guess that Salvador Dali guy was a moron then, ay Donald? Dude you have absolutely no clue what you are talking about. Every single one of the people we hire in our various Arts and Music Departments, (and many Directors) are indeed Artists, as well as Craftsmen! Every single one of them, come from some area in the traditional arts, and many of them hold degree's in visual arts or musical arts! I just watched a veteran film director, sculpt a beautiful highly detailed creature for a mold not to long ago. (and it was some of the fastest sculpting I've ever seen, btw.) For the overwhelming majority of painters, scenic's, animators, cartoonist, sculptors, illustrators, sketch artists, graphic artists, modelers, set designers, and even camera operators, etc... the use of their talent in the film industry is simply to provide income while pursuing their dreams in other areas of the arts. It's simply ridiculous to think that a field formed for the sole purpose of creating moving IMAGERY to tell stories, isn't going to attract an overwhelming number of Visual Artists!

How is still photography considered an Art, and motion photography isn't? And what God left you in charge of deciding what is art and what isn't anyway?

And yes in my industry we are a SMALL business, NOT a midsized business. Any smaller and we'd be film students, and no-budget productions. Anchor Bay, Summit, Overture, those are midsized companies (posing as indies) with production operations in the 5 to 25 mil range. WB, Paramount, Universal, Disney, etc, those are big corporations...

"You should be taxed the same as everyone else" ... When did I say we should be treated differently? I argued that IF your going to advocate that people be forced to substitute an agency of force over their ability to choose whats best for them. Then it should be because they are responsible for the problem, (which they aren't, Bush is) and therefore deserve the punishment. If not, then they should be forcefully taxed the same amount as everyone else.

Thre is no such thing as an agency of force, you a re on that tangent away from rality again. And you ARE a mid sized businesss, dont care how you want to rationalize it, if you make over $250k. And few artists get medical or retirement, except in studio work, the vast majority dont. Just talked with a friend who sang with Sting for years, and no insurance so she got a job to help pay for it. Most artists dont get such things, you are in ENTERTAINMENT, not creative art.

Sorry if your ego cant stand the thought. Doesnt change the agency of forcese view of you, what is that, some Ayn Rand nonsense? Deal with reality here, you gotta pay for what you get, its that simple. No tax cuts or loopholes, we are at war AND a huge deficit, time to sacrfice, I know that is a foreign word these days, but get over yourselves. Tighten you belts, and Get to work.! Your tax cut and overpaid sallary is what caused this. Stop pointing finger, It's not about YOU, its about US. And the U.S. is bankrupt.


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