French Government to Block Artwork Tax Bill

The French government Tuesday moved to block a budget amendment introducing a wealth tax on artworks, following a storm of protest from top museums including the Louvre and the Pompidou Centre.

"The government's position is quite clear. Artworks will not be included in the assets liable for wealth taxation," Prime Minister Jean-Marc Ayrault told Europe 1 radio, after art world heavyweights sounded the alarm.

The French parliament's finance committee last week adopted an amendment, tabled by a member of the ruling Socialist Party, that would expand the assets covered by the ISF wealth tax to include art worth 50,000 euros or more.

Artworks have been exempted from the ISF since it was created in 1982.

The measure is now to go before the full parliament which Tuesday started examining the 2013 budget, aiming to save 36.9 billion euros ($48 billion), much of it through massive cuts in public spending.

A spokesman for the Socialist group in parliament, said a few hours later its lawmakers would not vote for the art tax, which even if approved in parliament needs government backing to become law.

Budget rapporteur Christian Eckert, who tabled the amendment, said he would uphold and defend it in parliament -- but acknowledged it now had "little chance of being adopted."

Faced with an uproar from art circles fearing a blow to the French market, Culture Minister Aurelie Filippetti had already voiced her opposition to the move, but this was not enough to reassure the art world.

In a letter dated October 12, the heads of seven of France's top museums and cultural institutions wrote to Filippetti warning her the amendment was a threat to their prized collections.

Bruno Racine of the French National Library, Henri Loyrette of the Louvre, Catherine Pegard of the Chateau de Versailles, Alain Seban of the Pompidou Centre, Guy Cogeval of the Orsay Museum, Stephane Martin of the Quai Branly museum and Jean-Paul Cluzel of the Grand Palais co-signed the letter.

"There are reasons to fear that taxing artworks will dissuade their owners from loaning them, for fear they will be identified," they wrote.

Taxing artworks, they warned, could also drive their owners to sell them abroad, leading to "the disappearance of historic collections, transmitted from generation to generation."

"The French public would be the first to suffer."

The row comes just days ahead of Paris' FIAC contemporary art fair, which brings 182 international galleries together under the vaults of the Grand Palais from October 18-21.

"If you want to nip in the bud France's rebirth as a major art market, this is the best way to go about it," FIAC director Jennifer Flay warned last week.

Top French art gallery owner Emmanuel Perrotin also told Agence France Presse the proposed tax would have "grave consequences."

"Clients will do all they can to express their passion in a more favorable environment," he said. "Paris would become seriously less attractive. And to the rest of the world, we'd look as if we were crazy."

Jerome Clement, head of the Piasa auction house, called the measure "totally populist and inapplicable since there is no way to technically evaluate the worth of an artwork."

"It will encourage fraud, and artworks will leave the country."

The amendment was intended by its backers as a signal that wealthier citizens are shouldering their share of the burden, as France braces for the impact of the upcoming austerity budget.