Indirect Aid to the Arts

1984 ◽  
Vol 471 (1) ◽  
pp. 132-143
Author(s):  
MICHAEL O'HARE ◽  
ALAN L. FELD
Keyword(s):  
Local Governments ◽  
Income Tax ◽  
Property Tax ◽  
Government Support ◽  
Tax Credits ◽  
Best Interests ◽  
The Public ◽  
The Arts ◽  
Federal Income Tax ◽  
Tax Deductions

Most government support of arts institutions is indirect—the result of charitable deduction provisions of the federal income tax, property tax exemptions extended by local governments, and other tax provisions. The money that government forgoes through these provisions must be made up by higher taxes for all taxpayers. The public, however, has little say about how these funds are spent. By its very nature, the income tax deduction places the decision-making power over arts institutions in the hands of those with high incomes. Those with high incomes receive a greater tax benefit for each dollar they contribute, increasing the amounts they donate, which increases the likelihood of their influence over those who run arts institutions, and they are allowed to place restrictions on the use of their gifts. Moreover the property tax exemption encourages arts institutions to invest heavily in real estate, which is not necessarily in the public's best interests. Replacing some indirect subsidies with direct subsidies and granting tax credits for donations in place of tax deductions would go a long way toward making the system more equitable.

scholarly journals Are Local Tax Rates Strategic Complements or Strategic Substitutes?

2019 ◽  
Vol 11 (2) ◽  
pp. 189-224 ◽  
Author(s):  
Raphaël Parchet
Keyword(s):  
Public Good ◽  
Local Governments ◽  
Income Tax ◽  
Economies Of Scale ◽  
Personal Income ◽  
Tax Rates ◽  
Strategic Substitutes ◽  
Personal Income Tax ◽  
Tax Rate ◽  
The Public

The identification of strategic interactions among local governments is typically plagued by endogeneity problems. I exploit the fact that local jurisdictions located close to a state border have some neighbors in another state and instrument the tax rate of neighbor jurisdictions with the state-level tax rate of the neighboring state. I use this instrument to identify strategic personal income tax setting by local jurisdictions in Switzerland and find that tax rates are strategic substitutes. I then develop a residence-based personal income tax competition model and show that tax rates are strategic substitutes if the elasticity of the marginal utility of the public good with respect to the tax rate is above one. This is notably the case in the presence of economies of scale in the public good provision. (JEL H24, H71, H73, H77)

scholarly journals The Dual Benefits Of Tax Credits: Taxpayer Income Generation And Economy Stimulus

2010 ◽  
Vol 3 (6) ◽  
pp. 37-40
Author(s):  
Robin Guerrero ◽  
Theresa Tiggeman ◽  
Tracie Edmond
Keyword(s):  
Income Tax ◽  
Local Economy ◽  
Tax Credits ◽  
Tax Credit ◽  
Lower Income ◽  
Economic Stability ◽  
Local Economies ◽  
The Past ◽  
Federal Income Tax ◽  
Child Tax Credit

Two important provisions of the Internal Revenue Code were the creation of the Earned Income Tax Credit and Child Tax Credit. Each of these credits were designed to reduce the amount of tax owed, thereby offsetting some of the increases in living expenses and federal income tax. For many this results in a smaller a tax liability. For others with little or no tax liabilities, the credit can result in a significantly increased refund. Many organizations such as the Volunteer Income Tax Income (VITA) Program, AARP and other similar organizations, cater to assisting these individuals. This is primarily due to the benefits that come from these credits which not only affect these individuals and their families but also the local economies. Larger refunds result in greater sustainability of taxpayer economic stability as well as an ongoing stimulation to the local economy. The purpose of this presentation is to describe the results of a study conducted involving the examination of each of these credits in relation to the taxpayer’s Adjusted Gross Income (AGI). The goal of this study was to demonstrate the importance of these credits as to how they benefit the lower income taxpayers. The study examined various taxpayers who qualified for the credits over the course of the past three years. The results demonstrated that roughly 20% to 25% of these taxpayers’ annual income is attributed to the assistance provided through these credits. Therefore, the need for the continuance of these credits is not only crucial for the welfare of the lower taxpayers but for stimulating the economy as well.

Changing Public Attitudes Toward Funding of the Arts

1984 ◽  
Vol 471 (1) ◽  
pp. 45-56 ◽  
Author(s):  
KITTY CARLISLE HART
Keyword(s):  
Federal Government ◽  
Local Governments ◽  
Public Attitudes ◽  
Government Funding ◽  
Social Stability ◽  
Public Funds ◽  
The Public ◽  
American System ◽  
Goods And Services ◽  
The Arts

Throughout this nation's relatively brief history, a tradition of pluralistic funding of the arts has evolved. The partners in this pluralistic system are individuals, the federal government, state, county and local governments, foundations, businesses, and corporations. With all of these partners participating, the system prevents an unhealthy dependence on any one source and keeps any one source from dominating. An increasing number of Americans view the arts in a positive manner. Nationwide studies and the 1980 census indicate that more Americans are participating, actively and passively, in the arts than ever before in the nation's history. However, the typical American does not seem to understand the pluralistic funding process, especially the role government should play in the funding partnership. The public needs to understand the benefits of government funding of the arts for our society. The funds that taxpayers invest in the arts provide essential tools for economic development and social stability. Public funds spent on the arts multiply in the economy at large, attract tourists, and generate the need for related goods and services. Thus the public needs to be educated to comprehend that government participation is a vital ingredient in our American system of pluralistic support for our cultural endeavors.

Sign in / Sign up

Export Citation Format

Share Document