A friend works on deciphering an old script based on very few samples. When he inquired about a piece he learned that more of those with similar inscriptions, presumably from illegal excavations, are stored in Geneva. Luckily he was granted access to have a look at them, I assume that the owners like researchers to validate their stuff, because they are suspected forgeries.
We don't really know how many more samples of that script are tucked away in vaults. In that context in don't care about a 1000 Picasso paintings. I would love for people to go crazy about the paintings, so long as they leave the truly old pieces to the researchers and in the ground until they can be excavated properly.
That's the worst part about it. I believe art older than a reasonable number of centuries (e.g 300 years) should not be tradeable. What's the moral argument for allowing it?
Private property? If you were to implement such a measure, it further encourages black markets, since the demand will still be there. A bad consequence can even be the destruction of art from either: hiding a crime or harder access to legitimate researchers and restorers.
Besides, not everything old is necessarily worth preserving.
You don't always need a physical object, you can take high-res scans or pictures.
Many pieces of privately-owned art are actually on long-term loans to museums.
Public museums usually have far larger stockpiles of objects than can reasonably be displayed. Many languish in storage for decades at a time. In private ownership they can at least be displayed and taken care of.
Private ownership of antiquity is definitely murky. If you can prove legitimate ownership for an object that is one thing, all of a sudden owning an ancient treasure is another. I think they should belong to the state in question (e.g. the people from that area).
Where do you draw the line? In the US we always side with personal freedom in the courts (e.g. if you want to own something, you can do so, pursuit of happiness and all that).
Antiquities don't have a lot of intrinsic value beyond display, so eventually (maybe 50 years, maybe 200 years) they will all end up in a museum. Generally they have higher value to people in the area from which they originated, so they will eventually migrate home. I'd prefer to be patient and let it happen naturally instead of implementing new laws.
this parallels the copyright laws many of us just hate that it is frightening.
the best solution that honors private property rights is to make part of the requirement of long term storage sites like this is to present high resolution scans of the artwork that would be freely available.
Some bemoan all this art being locked up out of private view, yet many government managed museums and the like are just as bad if not worse as I doubt an investor would let their collections suffer from neglect.
Agreed. The only reason I can sort of accept is that making trade illegal would cause some items to be hidden completely. (Which is not a moral reason to accept trade.)
Can anyone explain how this works from a tax perspective? As far as I know, goods in free ports are basically "in transit between two countries" for tax purposes. I.e. they left their origin, but have not entered their destination yet. I can see how that temporarily avoids sales tax (or VAT). That's also the tax mentioned in the newspaper. However, as soon as you bring that artwork to its destination, you have to pay that tax. And by that time, it will probably be much higher than now. First, the tax will most likely have increased (VAT rates never seem to go down). Second, the art will have appreciated in value, increasing the taxes due on import even more. All that considered, this does not seem like a very good strategy to me, at least tax-wise.
Someone who buys a $50 million painting at auction in New York, for example, is staring at a $4.4 million sales tax bill. Ship it to a free port, and the bill disappears, at least until you decide to bring it back to New York.
and
Despite enhanced Swiss efforts to track inventory and ownership, the free ports there remain an opaque preserve (though more transparent these days than counterparts in places like Singapore), filled with objects whose ownership can be confoundingly convoluted.
You keep it there until the value appreciates substantially, the item can stay there are long as you need it to. As the article mentions, the problem with these warehouses has been that there's been very little visibility of what is actually being stored as they become black holes into which these treasures disappear. I suspect many of these objects aren't directly owned by the super-rich individuals themselves, but are owned by offshore companies with hugely obfuscated paper trails that detach any tax liability from their human owners.
Also:
Collectors and dealers choose to store art in the free ports for more pedestrian reasons than tax avoidance. Some simply have no more room in their homes, said Georgina Hepburne Scott, who advises collectors. And in a free port, their property is protected in climate-controlled environments, often under video surveillance and behind fire-resistant walls.
Much (most?) of this art is being purchased without any direct intent to ever exhibit it anywhere (even privately). If the purchaser sells the art in the future, the entire transaction can take place within the freeport and no transaction tax applies.
"Temporarily" in this case can mean decades, by the end of which inflation and time value of money can considerably erode your multi million dollar sales tax bill. As an added bonus you can get a loan on your painting while it's in the warehouse because lenders can limit your access, thereby ensuring that you neither damage the collateral nor move it beyond their reach.
> inflation and time value of money can considerably erode your multi million dollar sales tax bill
No, when importing the piece of art to its destination, VAT tax apply on its current value at the current VAT rate. So the opposite happens. Instead of eroding over time, the tax bill gets larger as tax rates are likely to climb and the value increase.
However, a good reason to do so is if your liquidity is limited. For example, if you e.g. as a German inherited a 100 million EUR piece of art stored in a free port today, bringing it to Germany would cost you 19 million in VAT. Assuming that you don't have that much cash laying around, you would face the choice of selling it or just keeping it there for a few more years.
1. Tax only applies when it leaves the freeport / is imported somewhere. Import duties can sometimes also be avoided by holding assets through offshore vehicles. Also, certain countries exempt museums from paying import duties. Many wealthy people actually have part of their home classified as a museum.
2. These items are often held as an investment, i.e. buy for $20mm and sell five years later for $25mm.
3. If you only care about the capital gain on the art (and not about what is actually on the canvas), you don't want to pay the VAT rate, because that's (often) not recoverable.
4. You can probably get a $10-15mm loan against a $20mm painting. If you can sell that $20mm painting for $25mm in five years, with $5m equity down, you will have doubled your money. That's an 18-20% annual return (after deducting interest expenses).
The art world is plagued with forgeries, some so good that nobody can prove or disprove authenticity. After all, with prices so high, there's every incentive to create very good forgeries.
Which raises the question - if one cannot discern a difference, is there a difference? And if there is no difference, why pay those fantastic prices? I wonder when the modern "tulip" madness will come crashing down.
I wouldn't mind decorating my house with cheap forgeries that are so good one cannot tell with the unaided eye.
There is a village in China that will make a copy of any artwork for you. I have to say that good forgeries are just as collectable as the real thing :)
> I wonder when the modern "tulip" madness will come crashing down.
Probably won't. Artworks with provenance are like bitcoin 'avant la lettre' - pointlessly expensive manufactured things in limited supply which are trackable/traceable to a certain point (not too much, not too little ...)
> Some see even higher stakes for contemporary works, as they can be whisked off, their paint hardly dry, before ever entering the public’s consciousness.
I guess we know what people will be doing for money when jobs are gone due to automation.
I liked the suggestion that they had to open up the warehouses for the public if they want to keep their tax free status. To have so much great art locked up for tax avoidance reasons is not ideal.
I think this tone "art was created to be viewed" sort of hurts. Painting deteriorates over time when exposed to light and normal air. Also there is a not much difference between painting located in some container, and museum in prohibitively expensive New York.
Rather than advocating against "evil superrich" we should focus on digitization. It should be a law that any piece sold, insured or stored has to digitized in high resolution.
> Also there is a not much difference between painting located in some container, and museum in prohibitively expensive New York.
Indeed.
"At New York’s Museum of Modern Art, 24 of 1,221 works by Pablo Picasso in the institution’s permanent collection can currently be seen by visitors. Just one of California conceptual artist Ed Ruscha’s 145 pieces is on view. Surrealist Joan Miró? Nine out of 156 works.
... The vast majority of art belonging to the world’s top art institutions (and in many countries, their taxpayers) is at any time hidden from public view in temperature-controlled, darkened, and meticulously organised storage facilities. Overall percentages paint an even more dramatic picture: the Tate shows about 20% of its permanent collection. The Louvre shows 8%, the Guggenheim a lowly 3%..."
It's worse than that, lots of art at good publicly owned institutions aren't easily available in high resolution. There aren't any really great central repositories for high resolution scans that are free to use.
I know in Moscow there is an interesting museum called the Pushkin museum which mostly consists of replicas of the worlds famous art. It was actually kinda enjoyable having for instance all the renaissance sculptures of note in one place
The last thing we need is more precedent for government agents entitling themselves to people's private property. You might as well be demanding that every programmer give the government a copy of their source code, in case you die or your company goes bankrupt and people get curious about what you were working on.
> You might as well be demanding that every programmer give the government a copy of their source code, in case you die or your company goes bankrupt and people get curious about what you were working on.
You give that example of hyperbole, but I believe that is quite reasonable. I am of the opinion that if you want your code to have copyright protection, you must have a copy of the source code either available to the public or placed in an escrow service to be made public when the copyright expires.
Copyright is an agreement between authors and society. In exchange for limited protection of the work, the work is not hidden from the public, and can therefore be built upon once the work is in public ___domain. If the author is not allowing the work to eventually enter the public ___domain, then the author's side of the agreement is not being upheld, and they should not have copyright protection either.
Copyright is a different matter. These historical artifacts won't have any copyright on them in the first place, and are physically secured to prevent people from seeing them. If somebody snuck in and took pictures, there'd be no reason for the owner to have any control over the resulting pictures(although the trespasser could be prosecuted).
With code, "[..]sold, insured or stored[...]" are the three verbs under consideration. Selling and insuring likely require somebody to look at it, so copyright is somewhat relevant(although you can make them sign an NDA). But that "stored" verb would mean that writing code for your personal or company use with no intention to ever show it to the public is also illegal. So you wouldn't just waive some benefits, but would be fined or jailed if you don't file a copy with the government.
But what if the ancient romans had GNUed code, and you discovered it 1000 years later, and kept it to yourself?
Governments already demand that you give up your intellectual property after a number of years, yet the same concept hasn't been applied to physical property yet.
That's a really good question. I guess code specifically wouldn't be copyrighted after that time and wouldn't have any value in its physical format. I'm also not sure how hard it is to track property ownership over 1000 years, or if it applies between governments. Ancient artifacts whose ownership is in question could be legislated to not transfer ownership to the discoverer; that's not really burdensome. There's also laws regarding abandoned property. If e.g. Stallman was buried with printouts of emacs and a tomb robber steals the copy, the entire chain of transactions is tainted from that point on.
But as painful as it would be to lose it, if you had verifiable proof that the documents the code is printed on were legally yours, you shouldn't be obligated by outside parties to handle them in any particular way.
It's pretty difficult to respect the position of the super rich in this scenario.
At best, they are avoiding taxes with the art. At worst, they are laundering money or hiding treasures plundered from places like Iraq behind a curtain of shell companies and noxious Swiss regulations.
They should keep helping people avoid taxes as this is the right thing to do. Tax is unethical by its very nature (it is theft, regardless of justifications).
That said, they could very well facilitate a tax-free art gallery environment trying to build mecas of fine art galleries.
Really? Because I see debates about taxation and politics in general all the time in the comments - especially when these themes are directly related to the posts.
Seriously, how can you say that comments about taxation are off-topic while this article is not off-topic and is currently on the front page? You can't really have a conversation about poverty, welfare and related policies without talking about taxation, and it's a weird moderatorial distinction.
This is going off topic, so , to bring it back to subject: What about the fact that most of these artifacts have shady past? Many are the results of stealing, looting, illegal excavations , and for the most part even the recent artists received very little in compensation. Since you are aiming for the right thing to do, how do you justify the ownership of a roman sarcophagus in the first place?
We don't really know how many more samples of that script are tucked away in vaults. In that context in don't care about a 1000 Picasso paintings. I would love for people to go crazy about the paintings, so long as they leave the truly old pieces to the researchers and in the ground until they can be excavated properly.