Just before the new year, Daniel Grant had an interesting piece in the Wall Street Journal about the proposed legislation, co-sponsored by Senators Domenici and Schumer and (not surprisingly) endorsed by Christie's, Sotheby's, and the Art Dealers Association of America, to equalize the tax treatment of art and other collectibles (which carry a capital-gains tax rate of 28%), on the one hand, and real estate and securities (which are taxed at 15%), on the other.
Grant seems to like things where they are:
"Reducing capital-gains taxes on art to the same 15% as real estate and securities makes sense only if one believes that art is just one more and equally important investment realm. 'The government is interested in encouraging people to invest in businesses and the housing market and other areas of risk-taking that stimulate job growth and generate tax revenues, and art doesn't really do that,' said Joseph Cordes, professor of economics, public policy and public administration at George Washington University. ... 'The government isn't trying to encourage or discourage the sale of art; rather, it looks to encourage entrepreneurship.' (On the public-policy side, he added, reducing the capital gains on art sales might have the 'unintended effect' of dissuading certain collectors from donating to museums.)"