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Right, it's defering gains. They are "storing value" and unlike stocks, depriving the world of art in the process
You can store value by buying gold instead, or just depositing money in a bank account.
Financially, buying art only makes sense if the value increases. And it might, but stocks are generally more likely to increase and therefore make a lot more sense than buying art.
In either case, buying them won't reduce your taxes.
Art absolutely increases in value. And it's steady, too, being unaffected by the market. Your stocks might crash but the art market won't and a new artist isn't going to change the value of a Van Gogh like the discovery of a gold deposit.
Furthermore, the art itself has no true value so the price can be manipulated through hype. I know someone personally (client at my old job) who proudly played this game with the paintings of a deceased friend. You just need one person to spend 100k on a painting (say, a friend...) And then suddenly every painting is worth 100k. Hype and repeat.
It's been years since I dug into it but here is a decent article (that I admittedly skimmed as I'm about to leave work) describing how art is used to evade taxes
The art market has its ups and downs, just like any other market. Last year it went down. Art buyers are fickle, so it's quite possible that they won't be willing to pay as much for your Van Gogh as you paid. In fact, that's why a lot of expensive art ends up donated to museums.
And of course hype is something found in all markets, not just art. Stories about Gamestop made the news, but the same thing goes on every day for other stocks. Buyers know the game, too. If you spend $100K on a random painting or random stock, it's quite possible others will point and snicker about how you overpaid.
Finally, your article describes how people avoid taxes on art, not how art is used to evade taxes. Unlike other investments, people who buy art generally want their investment shipped to their home where it can be proudly displayed. Shipping incurs lots of extra costs, including import/export tariffs. And people try to various ways to avoid some of those costs.
Whereas someone who buys stocks is happy to let their certificate sit in their broker's office, so they don't have to worry about those costs at all.
I'll concede that art is closer to stocks than I implied, but I think we both agree that the wealthy use it as an investment - whether it's a good one or not. Correct me if I'm wrong there. I'll reply to the rest of what you wrote out of respect but I worry I may have led is into the weeds with specifics when the real point I was making is that using it as an investment feels gross to me.
I don't believe that the majority of the people I'm describing are doing it for the love of art. It's an investment vehicle like anything else - one that is significantly less-regulated than stocks. If they truly cared about it, there wouldn't be hundreds of thousands of paintings sitting in tax-free storage.
Forgive me for the weak article, as I said I didn't have time to read it all and couldn't remember where I was reading about it a few years ago.
I agree!
Thank you for the mutually respectful discussion