When the final gavel sounded the close of bidding for Van Gogh's ``Irises'' painting Nov. 11, the record-breaking price of $53.9 million exceeded the predictions of almost everyone in the art world. In part, the price was the result of Reagan administration tax policies. Recent changes in the tax laws have had a significant, though indirect, effect on the arts, which the ``Irises'' sale has made evident. John Whitney Payson, the New York collector who put the Van Gogh painting up for sale, had originally planned to donate the work to Westbrook College in Portland, Maine. He found, however, that disincentives in the 1986 Tax Reform Act - specifically the ``alternative minimum tax'' - compelled him to sell the work instead.
The alternative minimum tax, which equals 21 percent, was established to ensure that no one with a substantial income could claim so many deductions as to pay no taxes at all. The tax applies to various areas classified as tax preference items, including charitable gifts of objects, and the benefit of a donation is now based only on the piece's original value when it was purchased and not on its appreciated value.
Mr. Payson had the choice of donating the work, bought by his mother for $10,000, and deducting only $12,100, or selling it.
The painting was reportedly purchased by an Australian collector, and this sale was but the most recent - if most extraordinary, because of the price - indication that foreign buyers, especially the Japanese and Germans, are buying heavily in the American art market.
Part of this interest is due to the falling value of the United States dollar against other currencies. Over the past year the dollar has declined almost 45 percent against the German mark and the Japanese yen, as well as 30 percent against the British pound, according to James Koppel, a commodities trader at Deak International in New York. This has helped spur American exports, Mr. Koppel says, but it has also turned many pieces of art in American collections into bargains for foreign buyers.
``With a lot of commodities, we've been seeing a lot of things going abroad,'' he observed. ``These are the lowest prices many foreign buyers have seen [in their currencies] for decades. Fifty-three million dollars sounds like a lot more money to us than it does to the Japanese. For them, it means what, say, $28 million meant to us last year.''
Gilbert Edelson, administrative vice-president of the Art Dealers Association, stated that the Payson sale and others like it ``are not a welcome development, in that American collectors and American museums are disadvantaged when it comes to obtaining art treasures. We're going to lose them, and for what?
``The dollar can go far lower, and probably will, but it won't help our economy one bit. Neither the Japanese nor the Germans will buy American goods, even though they are cheaper, and it's because American manufacturers don't have the reputation for making high-quality, long-lasting products.''
On the domestic side, the Reagan administration has also affected the arts adversely in an indirect manner. Although the budget for the National Endowment for the Arts has not been cut in the past seven years, federal cuts in health and human service funding have resulted in a leveling off - or, in some cases, a reduction - of corporate support for the arts, because many companies have shifted some of their giving toward the social services to make up for the difference.
Douglas Davis, executive director of the Oregon Business Committee for the Arts, noted that ``you have to feed people, take care of the homeless, before you give to the arts.''
``A lot of corporations have been telling me that they feel increased pressure to help those who have been hurt by the Reagan budget cuts,'' says Larry TerMolen, development director at the Art Institute of Chicago. ``I applaud them for it, though it makes my job harder.''