Art is definitely used as a tax dodge by the wealthy, but to suggest that the entire ecosystem is nothing but that is not correct. People that say this usually lack a deeper understanding of contemporary art.
I'm still not clear how this is even supposed to be tax evasion. If you're not operating in a jurisdiction then you shouldn't owe them any taxes. Which jurisdiction is even alleged to be owed the money, and on what basis?
Well, presumably the whole concept of a Freeport is kind of a “hack” against the tax system. These items are treated as if they’re in transit, but they are stored indefinitely.
They're treated as if they're outside of the jurisdiction, because they are. It's not a hack, it's just a fact. It's not even weird. The weird expectation is that areas outside of a given country's jurisdiction wouldn't exist.
US citizens owe the US government taxes on their income regardless where it was earned, barring some specific exclusions. At any rate, where a company is registered or where an asset is held doesn't necessarily have much bearing on where work is done or what infrastructure is used and to what extent.
> US citizens owe the US government taxes on their income regardless where it was earned, barring some specific exclusions.
That seems like the flaw here, not the other thing. Why should the US government have any entitlement to tax activity that occurs entirely outside their jurisdiction?
> At any rate, where a company is registered or where an asset is held doesn't necessarily have much bearing on where work is done or what infrastructure is used and to what extent.
But that's the point. They're meant to tax in the places where this sort of thing happens. If you have a building somewhere, there is property tax. If you make sales somewhere, there is sales tax or VAT. If you have employees somewhere (or are an employee and perform work somewhere), there is payroll tax.
Storing art can be done most anywhere, so naturally it happens in the places that allow it under the most favorable terms, but what's the problem there? It's the same as companies putting their facilities in some other jurisdiction because it has lower taxes. It's the normal and expected thing and one of the rare incentives for governments to improve their cost efficiency through competition.
>That seems like the flaw here, not the other thing. Why should the US government have any entitlement to tax activity that occurs entirely outside their jurisdiction?
Tax evasion doesn't cease to be tax evasion because you don't feel like you owe the government taxes.
Whereas it does cease to be tax evasion when it literally isn't tax evasion, it's tax avoidance. And then people are complaining about this as if it shouldn't be possible, when it should be the default. To owe a jurisdiction taxes you should have to be doing something in it.
