Advocacy Coalition Framework and Arts-Related Tax Fairness. Nancy Cooper PUBA 602. April 2014
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1 Advocacy Coalition Framework and Arts-Related Tax Fairness Nancy Cooper PUBA 602 April 2014
2 Over the past fifty years, a number of arts coalitions have worked to reform tax policies that unfairly target artists and discourage the donation of their works to public institutions. Since the occurrence of major tax reforms in the late 1960s, the donation of artwork by its creators has drastically decreased, while collectors continue to donate. This issue can be directly tied to a discrepancy in tax policy that allows for differing tax deductions to be taken by art creators and by art collectors. While arts coalitions work to lobby politicians and educate the public on the harmful effects of this policy issue for the American public, arts-related tax policy reform has continued to be unsuccessful. The Advocacy Coalition Framework is an excellent tool for explaining the attempts at tax-related policy change over the past fifty years, and for attempting to better understand other forces at work in defeating the passage of arts-related tax reform bills. Introduced in the 1980s by Paul Sabatier and Hank Jenkins-Smith, the Advocacy Coalition Framework provides a method for helping understand the policy making process, specifically relating to individual decision making processes and collective impacts. According to public administration scholars, the ACF is a policy process framework that has been developed to simplify the complexity of public policy, and has been applied to over one hundred policy issues over the past twenty years (McQueen, Sabatier, Weible 2009). There are five main elements that build up the framework. Sabatier and Jenkins-Smith assert that a study of policy change must take place over a span of at least ten years for the process to be fully understood. Scientific and technical information play a large part in policy change, as does the policy subsystem. The framework breaks away from the traditional iron triangle model to include
3 officials from all levels of government, consultants, scientists, and members of the media [in] the set of policy subsystem actors (UCD 2014). The ACF Framework also upholds that beliefs directly impact policy decisions. Sabatier and Jenkins-Smith defend Simon s bounded rationality theory, which claims that due to limited decision making resources, individuals often rely on intuition, emotions, and experience to make decisions (UCD 2014). This limits individuals from making completely rational decisions. The ACF asserts that within bounded rationality, the most influential political decision-making resource used by individuals rests in one s belief system, ranging in significance from deep core beliefs, policy core beliefs, and secondary beliefs (UCD 2014). Political coalitions lie in this middle ground: policy core beliefs. As alliances are formed, compromises can be made regarding policy core beliefs to benefit the overall mission of the group, unlike deep core beliefs, which are engrained from an early age and rarely will change. To help change policy core beliefs and secondary beliefs, policy coalitions will often encourage policy learning to further their advocacy goals, as voters often lack the scientific and technical knowledge needed to change their policy views. While the ACF is not a perfect model for explaining all policy processes, it can provide a framework for many policy areas. For example, the ACF is an effective tool for studying the interaction between the government and non-profit groups that engage in political advocacy. Even from the earliest years of the United States founding, scholars have emphasized the power of advocacy coalitions. As Professor Steven Smith writes, Alexis de Tocqueville forcefully argued that America s democracy rested on its extensive network of voluntary associations Voluntary organizations were also important because they provided a vehicle for
4 individuals to come together to influence government policy (2003). With the rise of the third sector, the American political system has experienced an increase in political advocacy from a wide variety of non-profit groups. Smith notes, The government and nonprofit organizations have become increasingly intertwined in the last twenty-five years due to direct government funding and new government regulation, as well as the increase in overall government policy activity (2003). As increasing government regulations impact non-profit finances and operations, funders and supporters of these organizations are growing more and more involved with the policies that directly impact the organizations missions. As entities that operate largely with public support, non-profits can rally a large group of voters and policy makers, however the capacity of nonprofit organizations to promote citizen engagement and influence policy is also dependent upon the capacity of political institutions to respond the goals and expectations of nonprofit organizations (Smith 2003). This is where the Advocacy Coalition Framework can be applied to this policy process. Non-profit policy coalitions can engage a variety of actors through policy learning to promote participation in policy change: Indeed, nonprofits themselves have become a well-organized lobby on policy issues affecting the nonprofit sector. Along with elected officials and formal institutions of government, nonprofits are part of the system of representation in American democracy (Reid 2006). In addition to policy learning, coalitions mobilize volunteers and resources to voice widespread social concerns They play significant roles in the initiation and advancement of ballot initiatives They coordinate scarce resources and reduce political competition and expand the exchange of information on and resources for policy influence (Reid 2006). Unlike many lobbyists who push politicians for selfish political gains, nonprofit political advocates typically argue that they
5 represent the collective interests of the general public and underrepresented groups as opposed to the interests of well-organized powerful groups, especially business, mainstream social institutions, and the elite professionals (Jenkins 2006). For this reason, non-profits can more easily gain public support than privately supported coalitions. Once such policy issue revolves around tax fairness for artists. Under current tax law, collectors who donate works of art, including visual art, as well as manuscripts and related works by authors and composers, are eligible for a tax deduction for the fair-market value of the gift (Americans for the Arts 2014). The artists, however, can only write off a deduction for the value of the materials, such as canvas and paint or paper and ink. This discrepancy, which dates back to a 1969 legislation, has created a huge disincentive for both emerging and established artists to donate their works to public institutions, such as museums, libraries, and universities. Since the passing of the 1969 tax reform, collecting institutions have seen a drastic decrease in gifts from artists. Americans for the Arts, a key advocacy coalition for arts policy reform, reports in its 2014 Advocacy Day Brief: The effect of the 1969 legislation was immediate and drastic: The Museum of Modern Art in New York received 321 gifts from artists in the three years prior to 1969; in the three years after 1969 the museum received 28 works of art from artists a decrease of more than 90 percent. The biggest loser was the Library of Congress, which annually received large gifts of manuscripts from authors. In the four years after 1969, it received one gift. (Americans for the Arts 2014)
6 This discrepancy has led to numerous artistic and historical works entering private or even international collections, never to be enjoyed or studied by the American public. In an NPR interview, Senator Patrick Leahy, a key political advocate of recent arts-related tax reform, spoke about the incredible collections that the United States is missing out on due to these outdated tax laws: We heard back a few years ago that Igor Stravinsky wanted to donate all of his papers to the Library of Congress. He could take the cost of whatever that amount in paper would have cost [so] he sold it in Switzerland Americans never got that chance to have that The IRS says it s literally worth the paper that it's written on with the ink thrown in. (Block 2008) This legislation is especially harmful to small scale museums that lack the resources needed to purchase contemporary works by established artists and rely on donations from artists to build up their collections (American Alliance of Museums 2013). Often artists wishing to donate to their alma mater or another public institution will wait decades to bequeath their own works, as works of art in their estate are taxable at their fair-market value the very same works they cannot claim tax deductions for donating while alive (Americans for the Arts 2014). This is not done out of selfish reasons, however, it is often a financial necessity needed to settle an artist s estate. Ultimately the law, as it currently is written, hurts both individual artists a well as the American public.
7 In recent years, a number of bills have been introduced in both the House and the Senate to directly reform H.R , The Tax Reform Act of 1969, and the Internal Revenue Code of 1986 as they apply to arts-related taxes (The Joint Committee on Taxation 1969). According to an article in the Tampa Bay Times, such a bill has been considered by Congress every year between 2003 and 2012 (Jacobson 2012). The most adamant supporter of this reform is Vermont Senator Patrick Leahy, who helped to sponsor the Artist-Museum Partnership Act, the most recent version of an attempt at arts tax reform (Wogan 2012). The passage of the Artist- Museum Partnership Act would "allow taxpayers who create literary, musical, artistic, or scholarly compositions or similar property a fair market value... tax deduction for contributions of such properties, the copyrights thereon, or both, to certain tax-exempt organizations" (Jacobson 2012). Before his presidential election, Barack Obama even co-signed the bill in the Senate, later adding support of the legislation to his presidential platform, claiming he was a "champion for arts and culture (Wogan 2012 and Americans for the Arts 2014). Dr. James Billington, the Librarian of Congress, is a huge supporter of this legislation, saying: The restoration of this tax deduction would vastly benefit our manuscript and music holdings, and remove the single major impediment to developing the Library s graphic art holdings. [The] bill would also benefit local public and research libraries. When this tax deduction was allowed in the past, many urban and rural libraries profited from the donation of manuscripts and other memorabilia from authors and composers who wanted their creative output to be available for research in their local communities. (Americans for the Arts 2014)
8 Clearly this bill would greatly benefit both the American public, as well as individual artists. Why, then, has reform been unsuccessful to date? While the Advocacy Coalition Framework has been successful at explaining the policy process for a number of years, there continue to be a number of criticisms with the framework. One criticism helps explain the lack of success with arts tax reform. As Sabatier writes: [the] degree of openness of political system depends on two things: the number of decision making venues, and the accessibility of those venues. For example, in the United States, due to the system of checks and balances as well as federalist structure, there are multiple decision-making venues (federal, state, and local as well as presidential, legislative, and judicial) that provide multiple access points and even incentivize participation. (UCD 2014) While the Senate has passed the Artist-Museum Partnership Act numerous times, the bill has not yet been passed in the House (Americans for the Arts 2014). Even with overwhelming Presidential support, the bill cannot seem to get passed. Other criticisms for the ACF point out that the framework does not account for self-interest and that it overlooks both policy stages and public opinion; perhaps these issues can explain with the tax reform has not yet been passed (UCD 2014). The Advocacy Coalition Framework states that technical or scientific knowledge is necessary to successful policy change. With this particular policy issue, technical knowledge would involve understanding of complex tax laws, as well as knowledge of how museums and other public
9 institutions function- topics that the average voter does not understand. Most citizens do not understand that these laws limit the scope of the collections at institutions they visit and support, and they cannot grasp the long-term effects of this outdated tax law. Clearly arts coalitions need to better educate the public on the long-lasting positive effects that tax reform would have for the entire population. While many legislators are in support of the reform, others need more constituents to get on board with the legislation to give it the support needed to pass a bill. In order to account for the effectiveness of advocacy by arts coalitions, a number of data points can be collected to better understand why the reform is failing. Americans for the Arts, the largest arts coalition in the United States, names Charitable Giving and Tax Reform as one of its top three advocacy issues. The organization lacks data, however, on where in the United States its advocacy issues have the most support, and where more policy education needs to occur. The coalition should survey a large pool of voters in states that support tax reform, as well as states that do not, to determine the level of awareness that voters have regarding the policy issue. This past March, over 500 people from 45 states attended Arts Advocacy Day in Washington, D.C to lobby for arts policy reform. The representatives, however, did not necessarily represent states with legislative support for the passing of the Artist-Museum Partnership Act, the major legislative reform that supports Charitable Giving and Tax Reform. While there seems to be great support from voters, activists, and lobbyists across the country, the support is not present in Congress. The coalition needs to locate this discrepancy between
10 citizen wishes and legislature actions to find where it can be most effective at further education and awareness. Based on the information currently available regarding the progress of tax reform, one could gather that there are supporters and advocates throughout the country, but that support for the reform is disseminated among the states. There is little opposition to the bill, so the support for the reform must be spread too thin. With increased research, advocates can better identify where their efforts should be targeted.
11 SOURCES American Alliance of Museums, (2013). Charitable giving. Retrieved from website: Americans for the Arts, (2014). Tax fairness for artists and writers creating America s artistic heritage. Retrieved from website: /files/pdf/2014/events/aad/congressional_handbook/ampa2014_final.pdf Block, M. (Producer) (2008). Leahy pushes, again, for artists' tax break [Radio series episode]. In All things considered. Washington, DC: National Public Radio. Retrieved from House Committee on Ways and Means, (2013). Bill summary & status H.R (H.R.2482). Retrieved from Library of Congress website: /home/legislativedata. php?n=bss;c=113 Jacobson, L. (2012, February). House bill exists but long odds of passage this year. Tampa Bay Times. Retrieved from promise/330/support-tax-deduction-for-artists/ Jenkins, C. (2006). Nonprofit organizations and political advocacy. The Nonprofit Sector: A Research Handbook: Yale University Press. books?hl=en&lr=&id=ligvl- clfiec&oi=fnd&pg=pa307&dq=advocacy+coalition+ framework+nonprofit&ots=a3nu2_fesq&sig=ttuvinmckgwfu4ltxfpr3yxrijy#v=onepag e&q&f=false The Joint Committee on Taxation, (1969). Summary of H.R , the tax reform act of 1969, as passed by the House of Representatives. (JS-61-69). Retrieved from website: McQueen, K., Sabatier, P., & Weible, C. Themes and Variations: Taking Stock of the Advocacy Coalition Framework. Policy Studies Journal, 37, Reid, E. (2006). Advocacy and the challenges it presents for nonprofits. Nonprofits & Government: Collaboration & Conflict (). : The Urban Institute. Retrieved from +nonprofit&lr=&source=gbs_navlinks_s Senate Committee on Finance, (2011). Bill summary & status, 112th Congress ( ) s.930. Retrieved from Library of Congress website: /home/legislativedata.php
12 Smith, S. (2003). Government and nonprofits in the modern age. Society, 40, University of Colorado Denver. (2014, January 1). Advocacy Framework Coalition Overview. ACF Overview. Retrieved March 16, 2013, from academics/colleges/spa/buechnerinstitute/centers/woppr/acf/pages/acfoverview.a spx Wadsworth, H. (1976). Private foundations and the tax reform act of Law and Contemporary Problems, 39(4), Retrieved from Wogan, J. (2012, July 1). No new tax deduction for value of artwork. Tampa Bay Times. Retrieved from /promise/330/support-tax-deduction-for-artists/
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