Taxing times mean there could be trouble ahead...
…but art dealers found a silver lining to the US fiscal cliffhanger as Art Basel Miami Beach opened to invited guests
By Melanie Gerlis, Gareth Harris and Riah Pryor. From Art Basel Miami Beach daily edition
Published online: 06 December 2012
As throngs of glamorous VIPs crowded into the Miami Beach Convention Center yesterday for the opening of Art Basel Miami Beach, the outside world was preoccupied by more practical concerns. The prospect of the so-called “fiscal cliff”—a raft of tax increases and budget cuts due to be implemented in the US in January (see box, p2)—is a prevailing uncertainty, and there are signs that the world inside the art fair is more aware of external economic events than usual.
Some dealers say that the impending tax hike is the latest factor playing to the advantage of the blue-chip end of the art market. High-end sales on the first day included Georg Baselitz’s Keine Zukunft, keine Zeit, 2010, for $500,000 (White Cube, L9), John Baldessari’s Prima Facie (Second State): Puzzled, 2005, for $350,000 to a European collector (Sprüth Magers, L16) and Fernand Léger’s Les deux femmes à l’oiseau (Two women with a bird), 1942, for $1.6m (Galerie Thomas, D6).
“The fiscal cliff has been good for this season. People are putting their money into art rather than taxes. It’s having a direct impact on the fair, in a good way,” said Adam Sheffer of Cheim & Read (L8). His gallery made early sales to US buyers, including Barry McGee’s mixed-media work Untitled, 2012 ($100,000). Another collector bought four collages from Tal R’s series “Fog Over Malia Bay”, 2011, for $20,000 each.
Using art as a medium-term store of value while other potential investments are proving volatile has worked in the market’s favour since the most recent economic turmoil kicked in. Dealers say this also contributed to the success of the recent New York auctions; more than $1bn was spent on post-war and contemporary art in a week in November.
Christophe Van de Weghe (D8) agreed that the situation “gives people another reason to buy art”. Robert Delaney of Bernard Jacobson Gallery (A5) said: “Art has always been a way for people to park money, and there will always be people anticipating the next economic crisis.” The gallery’s sales included Robert Motherwell’s Australia II, 1983, which sold to a US buyer for around $350,000.
Should the tax changes be introduced, however—even in a milder form—the chances are that wealthy US collectors, faced with bigger tax bills, may temper their enthusiasm for buying art. “There will be a pause for a minute or two, but not for the long term,” said Lucy Mitchell-Innes of Mitchell-Innes & Nash (C9). The gallery sold three paintings by Keltie Ferris, including R-E-A-C-H, 2012, which went for around $45,000.
A few extra percentage points of tax are unlikely to make a difference to the super-rich, and major Miami collectors at yesterday’s opening seemed relatively unconcerned about the implications for the art market. “Tax is not an issue; it does not enter my mind,” Jorge Pérez said. Craig Robins agreed: “The concern about the potential fiscal cliff has not impacted on my buying.” The California collector Norman Stone said: “I’ve been collecting for 25 years and art hasn’t always been seen as an asset or commodity.”
Other collectors at the fair included Paris-born Jean Pigozzi (who was first over the line), New York’s Susan and Michael Hort, the Lebanese entrepreneur Tony Salamé, the Las Vegas casino magnate Steve Wynn and the Libyan princess Alia al-Senussi. The US museum directors Jeffrey Deitch (Museum of Contemporary Art, Los Angeles), Michael Govan (Los Angeles County Museum of Art) and Glenn Lowry (New York’s Museum of Modern Art) were among the early visitors, as were the art advisers Patricia Marshall, Allan Schwartzman, Candace Worth and Kim Heirston. Celebrities included the actor Owen Wilson, the rapper P. Diddy and the fashion designer Diane von Fürstenberg.
The European dealers were also unconcerned. “You hear people talking about this [fiscal cliff], but in the US, there is a much bigger and more organised system of advisers who are more tuned into the wider global economy and [are] advising clients accordingly,” said Anna Caruso of Mai 36 Galerie (L4). Its sales included Flavio Garciandía’s The strange sexual life of Barnett Newman, 2001, which went for $30,000 to a US collector. Sales at Galerie Perrotin (G6) included John Henderson’s bronze wall piece Untitled, 2012, which went to a French private collector for €26,500. The gallery’s owner, Emmanuel Perrotin, said: “It’s difficult to worry about an extra 4% [of income tax] in the US when you look at what is happening in France.” Plus, Van de Weghe said, “lots of Americans don’t mind paying taxes—it gives the country a little kick”.
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