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Committee Statements

Guthrie Statement: Hearing on “The Economic and Employment Impact of the Arts"

One of the benefits of living in a free society is that its citizens are free to create.

This freedom has given birth to art forms that Americans – and people around the world – have enjoyed for decades.

Take music: Blues. Country. Jazz. Rock ‘n’ roll. All of them come from America.

Then there’s Broadway and Hollywood. For more than a century, American films, plays, musicals and TV shows have been loved and respected the world over.

Mr. Chairman, we should be proud of our artists, but not just for their creative achievements. After all, they are in show business. It’s a real industry that has ups and downs like any other.

And what helps support this industry?

In large measure, non-profit and charitable foundations.

When you look beyond the superstars with their mansions and their millions, you find that many talented working artists across the country are supported this way.

Experts say the $43 billion that foundations give out help generate more than a half trillion dollars in household income. It also contributed some $145 billion in tax revenues.

That’s music to a lot of people’s ears – especially in these times. But it seems President Obama wants to stop the music and send the band home.

The Obama Administration’s new budget would limit charitable deductions in the tax code.

These tax deductions allow – even encourage – people to give to foundations and charities. Whether they contribute 25 dollars or 25 million, a deduction applies to them.

And foundations need these donations. Usually, individual contributions are often their sole source of income.

So, if you limit charitable deductions, you limit support of the arts – and other worthy causes.

It’s that simple. But don’t take my word for it.

Ask Martin Feldstein. He’s an economics professor from Harvard University. He wrote an op-ed piece in The Washington Post yesterday about this very subject.

In his article, Feldstein says President Obama’s proposal would effectively transfer $7 billion a year from the nation’s charitable institutions to the federal government.

This transfer, Feldstein says, would basically be a nationwide tax on charities.

After speaking with Professor Feldstein, go talk to the Association of Performing Arts Presenters.

In a report out this month, the association says that more than half of the performing groups with theaters and facilities have failed to meet their fundraising goals.

As the Obama Administration tinkers with the tax code, it’s important that we, as members of Congress, understand how it affects non-profits and foundations.

Whether it’s supporting a local theater group, homeless shelter or children’s hospital, non-profits and charities play a starring role in American life. 

We should create policies that best increase philanthropy and private resources available for charities, including support of the arts.

Finally, we should highlight how private charities are independent, effective and innovative – just like American artists, including the ones with us today.

 

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