Why the Federal Government Should Not Fund Art

If the federal government did not fund art, there would be no art, right? Obviously no one believes that.

American households regularly spend an average of two to three thousand dollars per year on entertainment, or around 5 percent of household spending. This includes spending on things like pets and sporting events, which aren’t art (if you believe Maryl Streep), as well as on arts including television programs, movies, and music. North Americans (mostly in the United States) spent more than $11 billion in 2016 on movies at the box office alone.

But to hear some people tell it, America’s artistic landscape would be devastated if the federal government did not subsidize the arts. Continue reading “Why the Federal Government Should Not Fund Art”

Separate Film and State

The government should play no role in film or art generally, for many of the same reasons it should play no role in religion. (The government should universally prevent force and fraud, as by pursuing thieves of artworks, but in such cases the government’s actions do not bear on the nature of the art.)

Earlier this month, the Denver Post published the article by Jason Blevins,“Colorado’s new film commission chief wants to boost state’s movie-making incentives.” While the first part of the piece reads like cheerleading for the idea, finally Blevins mentions a critical study. And he quotes Harris Kenny, “Basically, this thing has become an arms race. I call it a race to the bottom.”

I wrote up some comments at the time that I thought I’d reproduce here:

Getting the state involved in cinema is a bad idea. Direct subsidies, as with the proposal to impose a special tax on movie tickets, unjustly forces Coloradans to finance films against their will. This violates not only their economic liberty but their right of free speech, which includes the right not to support ideas one opposes. Discriminatory tax programs unfairly tax some businesses more than others. The government should tax everyone the same low rate, not play favorites.

Moreover, playing favorites doesn’t pay off in the long run, because it just spurs an expensive bidding war with other states. The impact on tourism is murky at best, especially given the direction of resources away from other possible tourist activities.

If the government wants to promote business in Colorado, it should offer appealingly low taxes and fewer hassles to all comers.

Corporate Welfare and Tourism

Today the Denver Post published a story by Jason Blevins claiming that corporate welfare for the tourism industry is responsible for the growth of Colorado tourism. I sent him the following letter:

Dear Mr. Blevins,

Your “news” article is essentially a regurgitated news release from bureaucrats and a company paid by the state to promote tourism funding.

Why didn’t you report:

a) Longwoods [the “research firm” cited in the story] is paid by the state to promote (“research”) state tourism funding.

b) Longwoods has a history of exaggerating the impacts of state tourism funding.

c) This year [meaning the previous year] Colorado also had good snow and record population (drawing visits to friends and family).

No doubt state tourism funding has increased tourism to the state. But you’re hardly reporting the whole story.

Thanks, -Ari

Here I add some additional points.

* As the Mercatus Center reviews, people are moving from less-free to more-free states, which also generates visits by people contemplating a move here.

* State funding for tourism crowds out private efforts to advertise tourism. Tourist attractions are perfectly free to pay for their own advertising, and to coordinate with others for broader campaigns.

* On the moral level, it is wrong to force people to finance corporate welfare for tourism against their wishes. It’s the job of government to protect people’s rights, not maximize tax revenues or tourism.


RussK commented June 16, 2011 at 10:36 AM
All good points. I’d like to mention that I have never been affected–to my knowledge–by Colorado state tourism advertisement. Everything I know about the state, and the things that I’d do there, was learned from word of mouth. Sometimes I think that state advertisement for tourism is more for promoting the state to its own residents. For example, I’ve lived in Minnesota for nearly two years, and I have seen countless advertisements about vacationing in the state; that seems absurd to me, as I’m already here.

Free Elmo!

Today’s Denver Post publishes some thoughtful letters on “public” broadcast funding.

While my own letter did not make the mix, I though it worth reproducing here:

The Denver Post argues PBS and NPR offer good content that “most Americans” wish to fund with tax dollars. But our nation is established on the principle that the rights of the individual may not be violated by majority rule. Just as “most Americans” cannot rightly prevent an individual from speaking, so the majority ought not force individuals to finance speech against their will. Elmo does not need a bandit’s mask, he needs freedom from political meddling.

Denver Post Reissues NREL’s Misleading Release

There are two stories here. One is that the National Renewable Energy Laboratory has put out an intellectually dishonest release touting the organization’s benefits to Colorado’s economy—without counting any of the costs in terms of tax subsidies and transferred resources. The second story is that the Denver Post reissued this release as “news” without bothering to mention its status as a copied release; the byline claims it is “by The Denver Post.”

Sure, if you totally ignore all the costs, any government expenditure looks like a great deal. Then again, if you ignore the costs, bank robbery also seems like a great deal, because look at how much the robbers are “stimulating” the economy by putting all that money into circulation! I have written about the general problem elsewhere, and economists have made the same rebuttals at least since the early 1800s.

But these sorts of releases are not intended as intellectually serious arguments; they are intended to stir up emotional support among economically illiterate (or simply dishonest) journalists, politicians, and taxpayers. So the fact that NREL would issue such a self-serving release is no surprise, even though any honest scientist working at the organization must be embarrassed by it.

I confess that I am surprised by the Post’s treatment of the release. I first heard of the story when hard-core leftist-environmentalist Pete Maysmith mentioned it on his Twitter feed: “More evidence that renewable energy is a boon for CO’s economy. #coleg http://bit.ly/g2P4Kz.” The shortened link accesses the Denver Post “story.” I got the idea that something was screwy when identical language showed up at Wind Today, and after a couple of phone calls I found the NREL release at the source.

I guess I just expected something a little more from the number thirteen newspaper in the nation.

Spare Us the ‘Sputnik Moment’

Am I the only one creeped out by Obama’s loving references to Mother Russia? He can’t get enough of his “czars,” and now we are supposed to be inspired to greatness in a “Sputnik moment.”

Yes, even the socialist Soviet Union could produce a functional space vehicle, the Sputnik. Meanwhile, the Soviet government oppressed, starved, and looted its subjects for the benefit of elite rulers. Like the Egyptian pyramids, the Sputnik was impressive, but I wouldn’t want to live under the government that produced it. Notably, to the degree that the Soviets succeeded at anything, they did so mostly by accepting help from the West, stealing intellectual property from the free world, and permitting its people to violate Communist principles by trading on the underground market.

Of course Obama did not mean to imply that we should strive to model our own efforts after those of the Soviets. Instead, he alluded to the American response of the moon missions. He may not have noticed that the last moon walk was in 1972, and the federal government has made little progress toward space exploration since then. Thankfully, private space companies are now kicking off a real space race.

Here’s what Obama said:

This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology –- an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

In other words, Obama wants central planners to redirect forcibly seized wealth to corporate welfare for medicine, technology, and energy. Because if there’s one thing you can say about the Soviets, it’s that they proved the efficiency of central planning. But forcibly transferring wealth from those who earn it to those adept at kissing bureaucratic ass does not “create jobs” or benefit the economy; it takes resources out of the free economy to benefit the politically connected. Obama would know this if he bothered to check in with Bastiat or Hazlitt.

It is indeed telling that Obama wishes us to draw inspiration from the “achievements” of the Soviet Union. But neither our economy nor our liberties can handle much more of Obama’s Soviet-inspired controls.



Anonymous January 27, 2011 at 10:52 AM
One of my economics professors penned the following couplet. He called it “Cheops Law.”

Screams of Slaves cannot Diminish,
The Grandeur of the Works we Finish.

c. andrew

Subsidies Versus Discriminatory Taxation

I applaud John Andrews and Citizens for Responsible Aurora Government for opposing “tax increment financing” (TIF) for the development of ranchland in that area. (Westminster might be looking at a similar mechanism to fund the now-“blighted” Westminster Mall; I’m not sure where that project has headed.) However, I caution free market advocates to carefully distinguish between outright subsidies and discriminatory taxation. It is unclear to me based on the information from Andrews whether the Aurora case involves both or only the latter.

I have not taken a deep look at how TIF works in Colorado. My understanding is that TIF essentially redirects some of a plot’s property taxes back to the development costs of that plot. This is the equivalent of a property tax reduction for that plot. Sometimes, the property tax of surrounding “blighted” properties can also be funneled into that redevelopment; I’m not sure whether that’s the case in Aurora. (Redirecting the property taxes of some plots to the owners of others is definitely a subsidy.)

Insofar as the TIF scheme involves only a plot’s own property taxes, the TIF should be considered a discriminatory tax, not a subsidy. A subsidy is the forced redistribution of tax funds from one party to another. A discriminatory tax taxes different parties different rates based on political considerations.

If a TIF scheme results in raising tax rates on other people in an area to pay for city services, that is still a discriminatory tax, not a subsidy.

In general, I am opposed to any policy that increases discriminatory taxation. It’s just not fair for governmental bodies to screw some citizens harder than others. It also makes for bad politics, as those with political connections get special tax breaks, while those without connections get screwed (worse).

However, I am NOT in favor of doing away with existing discriminatory taxation when that means raising net tax collections. If a mugger steals $10 from Abe and $20 from Ben every week, the situation is not improved if the mugger starts stealing $20 from Abe as well. Instead, I favor converting discriminatory taxes to equitable ones only when it results in the same (or less) total revenues, meaning some people will pay lower taxes.

A discriminatory tax involves taxing comparable parties different rates. I am not including taxes that treat basically different parties differently. For example, a progressive tax taxes the wealthy a higher percentage, but this applies universally. If you are wealthy and then you become poor, your tax rate will automatically drop. Likewise, when Colorado charges a sales tax on a purchase from a Colorado retailer but not from a Washington retailer, that is not discriminatory in the vicious sense, because federalism is incompatible with interstate taxation.

Having made that caveat, I am prepared to declare that discriminatory taxation is bad, and the proper remedy is to equalize tax rates such that total revenues stay the same or drops.

Strauch Clarifies Norton’s Remarks on ‘Too Small’ Jobs Bill

Both the Huffington Post and Colorado Pols have been having fun with Jane Norton’s comment that the Congressional jobs bill “was too small.”

Norton, the Republican frontrunner for the U.S. Senate seat, made the remark in an interview with Fox News yesterday.

I called up Norton’s office while conducting research for an upcoming column I’m writing with my dad for Grand Junction’s Free Press. Nate Strauch, Norton’s Press Secretary, said that what Norton meant was that “the impact was too small, not the price-tag was too small.”

But that implies that she did favor some sort of jobs bill, just one with a larger impact, does it not?

Strauch said “she supported a number of different measures,” such as “suspending the payroll tax for small businesses.” So Norton wants to cut taxes without touching spending levels? That’s not much of a policy.

Does Norton plan to answer the Armstrong Survey at http://tinyurl.com/cosurvey10? Strauch said there are “a number of surveys in the queue right now and we are working through those.”

Would I be horribly misunderstood if I called Norton’s commitment to a timely response “too small?”