Revolutionize Arts Funding With A Small Tax

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Michael Wilkerson, director of arts administration programs at Indiana University, Bloomington, has an idea that he thinks could funnel more money to the arts and lessen the influence of politics on the funding process: Use a small tax on the arts to pay for arts grants. I recently spoke with Wilkerson about his idea. Our exchange has been edited and condensed.

What problem would your idea address?

There just isn’t enough money in the nonprofit arts. Arts administrators spend an extraordinary amount of time fundraising and worrying about whether funders—usually individual donors but sometimes corporate foundations—will find their content acceptable. So often, even unconsciously, decisions are steered toward conservative donors’ preferences. The National Endowment for the Arts’ budget has shrunk dramatically over time after adjusting for inflation, and political problems have kept it from growing. At any moment, somebody on a grant from the NEA—or from the state arts councils, which are funded in part by the NEA but the NEA does not control—could do something outrageous that could take down the NEA in the next Congress.

How would the alternative funding structure you propose work?

I call it “using the arts to pay for the arts,” because it would be a small tax on tickets, downloads, and streaming. If you aggregate all these taxes—these would be small taxes: 1 percent, 3 percent, a quarter on movie admissions—at those kinds of rates, you could aggregate a couple billion dollars each year to give to the arts. Right now, the NEA grant budget is somewhere below $100 million. You could aggregate that money without inflicting pain on anyone or causing a drop in attendance. The money would essentially come from users of the arts, who would be providing a little drop of funding that could be redistributed to arts organizations or to artists who don’t have enough to get by on at the moment. Part of why I think this is a good idea is that lots of for-profit artists get their start in nonprofit organizations. Actors start off in community theaters, and then they make it to Hollywood.

What amounts would you propose for the tax?

I propose 25 cents per ticket on movie tickets, theater tickets, and concert tickets. Anything above 1 percent, you get vastly above what there has ever been for public grant money in the arts. I propose 3 percent on nonticket purchases, and 25 cents flat on tickets to avoid weird numbers.

How would the money be distributed?

The NEA is a major thought leader—I don’t want to lose that. So with my proposal, the NEA wouldn’t worry about giving these grants, it would worry about arts policy. This other agency I propose, the United States Fund for the Arts, would just exist to give out the grant money from this user fee. It would have a flow of funds that wouldn’t go through yearly congressional appropriations and would go through far less criticism. I don’t think it should be part of the NEA, because that might drag it back into the political problems that the NEA currently has. I think the grants would be similar to the NEA—you’d have a board to oversee them, you’d have a staff, and every now and again, you’d take a look at whether the categories are appropriate.

What would it take to make this happen?

I’d like to think that even conservative politicians would appreciate the trade-off of having a new tax, which we could call a “user fee” and which they’d have to pass only infrequently. It could have a sunset provision in place for X number of years. There should be an opportunity for people to weigh in with evidence as to whether it’s helpful.

This article is from the archive of our partner National Journal.