In Mexico, Artists Can Pay Taxes With Artwork - Eva Hershaw - The Atlantic

[MattSh]

MEXICO CITY—On a rainy Friday night in Mexico’s capital, Antonio ‘Gritón’ Ortiz poured himself a glass of tequila. Across the room, “The Girl from Ipanema” quietly seeped from a paint-splattered radio. “I’ll listen to almost any music while I’m working,” the 60-year-old artist said. “Like Yes! I really like Yes. The progressive rock band. You know them, right?” Water was boiling on the stove, and he poured it into a pre-packaged Korean noodle bowl. It was 10 p.m., time for dinner in Mexico. “I’ve been painting since I was 22, and not all of those years were easy,” he said. “But I do what I enjoy, and so far I’ve been able to make that work.”

For the past 28 years, Gritón has not paid a dime to the Tax Administration Service (SAT), the Mexican equivalent of the IRS. But he is no criminal. In fact, in a country that has lost an estimated $872 billion to money laundering and tax evasion over the past four decades, Gritón is in good standing with the law. Like more than 700 artists across Mexico, he takes part in a Pago en Especie (Payment in Kind) program—the only one of its type in the world—that allows artists to pay federal income taxes with their own artwork.

The program was hatched in 1957, in the throes of the so-called “Mexican Miracle,” a period of 40 years that saw sustained annual economic growth of between 3 and 4 percent. As legend has it, muralist David Alfaro Siqueiros, one of the most influential artists of his generation, approached the secretariat of finance in 1957 with a proposal to keep a friend and fellow artist out of jail for tax evasion: Let him pay his debt in art. The agreement laid the foundation for Pago en Especie, which today is a public collection of nearly 7,000 paintings, sculptures, and graphics accepted as tax payments from some of Mexico’s best-known artists.

When President Enrique Peña Nieto took office at the end of 2012, the outdated and mismanaged Mexican tax system was one of his first targets. He announced sweeping tax reforms last September, promising to end special programs, close corporate loopholes, and increase the taxpayer base in a country where, in 2012, tax revenue accounted for 8.5 percent of GDP. The proposed reforms were unpopular with business elites and the country’s most conservative politicians, who threatened to abandon the political coalition that Peña Nieto had so carefully assembled.

http://www.theatlantic.com/international/archive/2014/04/in-mexico-artists-can-pay-taxes-with-artwork/360519/