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Art Market

A Primer on Droit de Suite, and Why the Artists' Dream May Finally Become Law

By

A Primer on Droit de Suite, and Why the Artists' Dream May Finally Become Law
Should the Equity for Visual Artists Act pass, auctioneers can expect to be spending more time in courtrooms sorting out questions of implementation.

Resale royalties are a divisive topic. In practice they work as a kind of capital gains tax levied on the profits made by the seller of an artwork, with the money going to artist rather than the government. (If a work is sold at a loss, no money changes hands.) One might expect that the divisions would simply be between artists, who would see a new income stream, and collectors, who fear another charge on top of a dealer’s commission or auction house premium, not to mention the government’s own capital gain tax. But the breakdown of opinions more often mirrors those of political ideology, with liberals supporting the idea of sharing the wealth and conservatives thinking the individual should keep what is his—and businesspeople just worrying that any change to the status quo might reduce their share of the market. 

The idea is popular in Europe, where liberals even dare the use the word socialism, and it is therefore widely known under the French term droit de suite. In America it has been widely shunned, with federal proposals never making it to a full vote in congress. The federal copyright office, which one might expect to favor such regulation because it operates largely on behalf creative producers, even quashed the idea in a 1992 report.

In addition to the ideological divide there are a host of devilish details to be reckoned with. At what value should these charges begin to apply? How long after a work was created should an artist or the estate continue to collect? Who is responsible for making the payments, and how do they figure out who to pay? Such questions led to a California law that passed in 1976—the only one of its kind in this country—virtually never being enforced. Last year it was struck down as unconstitutional, because its effects inevitably reached beyond the state’s borders.

Jerry Nadler, a Democratic congressman from New York City, has been pushing for a federal statute for several years, with the latest version, known as the Equity for Visual Artists Act (EVAA), currently languishing in committee. On December 12, however, the bill made real headway when the copyright office presented an “updated analysis,” concluding that the time is now right to enact a law at the federal level. In addition to expressing a desire to bring the U.S. in line with the practice in 70 other countries, director Maria Pallante singled out the argument that “Visual artists typically do not share in the long-term financial success of their works because works of visual art are produced singularly and valued for their scarcity, unlike books, films, and songs, which are produced and distributed in multiple copies to consumers."

While this endorsement may well be an essential milestone in the march toward passage of the EVAA, opponents can rest easy with the knowledge they have the even more powerful forces of government gridlock and stagnation on their side.

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