The Art Market Has a Tax Problem

When it comes to governments, they often play the role of Robin Hood — with one major difference:

They take money from everyone and give it back to some.

But definitely not all.

Today, I read about attempts to reform VAT on art in Europe.

“Arguments in favor of maintaining a high VAT claim artwork is a luxury good deserving of ordinary, higher VAT rates. However, opponents to that view say art is also a cultural good, and a lower VAT will benefit artists and cultural institutions—not to mention the economic gains associated with jobs created by a thriving arts sector.”

Sounds reasonable. But at the same time… it doesn’t.

How exactly is a lower art tax supposed to stimulate the industry in, let’s say, Berlin, where authorities have decided to cut grants for cultural organisations by €130 million?

I don’t fully understand.
Maybe because I’m not European.

But let’s forget about money for a second and talk about the actual art.

What is art anyway?
For me, art is a way of documenting reality through an artist’s individual vision.
Some artists document their inner world.
Others document the world around them.
Both matter.
Especially now.

We live in an era when fake news can be generated by AI in seconds, while social media platforms and technology are controlled by corporations — despite all their beautiful speeches about free speech.

So documenting reality through something extremely traditional suddenly feels important again.

Like oil painting.

A piece of canvas covered with actual paint by an actual person.
A medium that, for now at least (lol), remains mostly out of reach of both AI and corporations.

And that’s exactly why I think the first sale of an artwork should have a 0% tax rate.

Zero.
Let artists sell their work.
Let collectors buy it.
Let the primary art market breathe.

Because a 0% tax on the first sale could completely change the relationship between artists, collectors and the wider contemporary art market.
It could also give us a reason to rethink the relationship between art and blockchain.

The art world still loves treating blockchain as either a speculation machine or a convenient tool for shady deals.

Which… fair enough.
We’ve seen enough of those.

But blockchain can also work as something much more boring.
And useful.
A decentralised record of provenance and ownership that is difficult to alter.

So:
Artist creates a work.
Artist sells it for the first time.
0% tax.
Transaction gets recorded.
Simple.
So, where does the government get its money?
Easy.

From the next person.
Every transaction after the primary sale should be taxed much more heavily.
Because once someone wants to buy your artwork on the secondary art market, something has changed.

The work is no longer simply something created by an artist trying to survive and continue working.

It has become desirable.
Collectible.
An investment.
Maybe even… luxury.

And in today’s world, luxury seems like a perfectly reasonable thing to tax.
So instead of taxing artists when they’re trying to establish themselves, tax the people trading their work once it becomes valuable.

Sounds slightly more Robin Hood-ish, no?

One day, I hope I’ll open the news and see politicians discussing something other than taxes.

Maybe artist royalties.

Maybe increasing the percentage artists receive when their works are resold.
Maybe asking how artists can actually make a living from the enormous market built around their work.

I hope.
🤞

...your worst artist and best friend,

hEhe and my contemporary art criticism

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