The sweeping new Republican tax bill is inching closer and closer to reality. Yesterday, House and Senate Republicans reached an agreement on the bill and final votes are just a week away.

But what do the hundreds of pages of documents mean for artists? After speaking to legal and tax experts about the wide-ranging implications of the plan, it is, sad to say, about as far away from artist-friendly as you can get.

The latest version has yet to be released publicly, so further changes could be revealed in the coming days. But it is clear that the bill has big implications for affordable housing, higher education, and income tax rates, most of which present new challenges for artists (or at least, artists not named Jeff Koons).

“The net result for MFA students and other aspiring artists will almost certainly be larger tax bills, less affordable housing, and the disappointment which comes from knowing that many will probably still be living with their parents until they hit middle age… if they are lucky,” attorney and art law specialist Thomas C. Danziger told artnet News.

Otis College of Art and Design’s main quad. Courtesy of Otis College.

Here are three elements of the proposed tax bill that artists are—or should be—paying close attention to.

1. Elimination of Affordable Housing For Artists

Following the sweeping tax bill passed by the Senate at the start of this month, Senator Pat Roberts of Kansas introduced an amendment (at 3 a.m., no less!) that strikes artists from the list of qualified groups who benefit from federally subsidized low-income housing via incentives that are given to developers. (Most of the art world became aware of the change when it was flagged by Kriston Capps on CityLab, and it remains in the latest version agreed on by both the House and the Senate.)

On its face, the move doesn’t seem so cruel. Senator Roberts seems to have simply swapped the word “artists” in the provision with the word “veterans.”

The problem, experts say? Veterans are already included in the list of qualified groups. (The list also includes handicapped or special needs people, women who are victims of domestic violence, and artists.) So rather than including veterans, Roberts’s revision is tantamount to removing artists altogether.

The problem is not “that a special ‘set-aside’ was created for artists,” points out Jamie Bennett, executive director of ArtPlace America, a collaboration among foundations, federal agencies, and financial institutions to make culture a core part of community development. It’s the fact that artists who meet the definition of low and moderate income are entitled to housing—which may become more difficult under the new tax plan.

ArtPlace America sent out an email yesterday urging supporters to contact Republican senators Orrin Hatch and John Thune, as well as representative Kristi Noem, to request that they keep artists in the bill.

“Part of it is I think society doesn’t value people in the arts,” says Robert Rozen, a Washington, DC-based tax attorney and housing credit expert of the motivation for the change. To some people, “it looks frivolous to build affordable housing for artists.”

Experts say that Robertson’s single-word legislation swap is just one part of a much larger cause for concern: “It’s one line of a 500-page bill,” says Heidi Zimmer, senior vice president of property development for Artspace, a nonprofit that helps secure affordable housing for artists. “There’s so much in the bill that’s concerning, it’s hard to know where to start.”

Danziger says that under the Republican tax plan, artists’ “subsidized housing will now mean, ‘my old bedroom in mom and dad’s house.'”

2. Grad Student Debt

New measures aimed at graduate school students will also have a large ripple effect on artists, given the number currently enrolled in MFA programs across the country. Although the most worrisome part of the bill—aggressive measures to treat tuition wavers as taxable income—does not appear in the final version approved by both the House and the Senate, other problematic revisions do.

Bennett of ArtPlace notes that there “are very specific changes being proposed for the ways that Pell grants are being calculated, and those actually disadvantage smaller colleges and universities where many of the nation’s premier arts programs are.” He says that these smaller colleges—including Otis College of Art and Design, New Hampshire Institute of Art, CalArts, and MICA—will be “severely jammed up in term of the kinds of grants that they’ll be able to offer.”

This is in addition to concerns already reverbating through higher education circles as a result of the House’s just-released “Higher Education Act Reauthorization” bill (December 4). The Association of Independent Colleges of Art + Design addressed these in a December 12 memo, including new limits on graduate students and parents’ ability to borrow money to pay tuition. Some of these limits now depend on how common it is for other students in the same program to default on similar loans. This measure is particularly problematic for disciplines like art, which are notoriously poorly paid, particularly early on in a graduate’s career.

3. Artists as… Corporations? 

The way you organize your art business has a big effect on the tax rate you pay. But that rate could change dramatically under the new plan based on the arrangement you choose.

In a story yesterday on suggested hacks for the new Republican tax system, the New York Times points out that in “pass-through businesses,” including sole proprietorships and LLCs, a company’s income is essentially “passed through” to the owner and is taxed at whatever tax bracket the owner is in. This was true before the Republican tax plan and is unlikely to change. Artists who do freelance and consulting work or sell their art directly to buyers (rather than through a gallery) might already operate as pass-throughs and enjoy breaks on profits and income.

But other options may become more appealing under the new plan. An artist could establish a so-called “C-corporation,” which means that his or her company’s earnings would be subject to the newly lowered 21 percent corporate tax. (It was previously 35 percent.) This model represents “a big reduction from the top individual rate, even with the pass-through discount,” says the Times.

The disadvantage of this arrangement is that, although corporate earnings are taxed at a lower rate than individual earnings, you will also have to pay tax on any distribution made by the corporation to you—effectively, a “double tax,” Danziger points out.

As the Times notes, the C-corp strategy makes sense for people who can keep their earnings at the corporate level and not have money distributed to them personally (at least for some period of time). So if you happen to be a wildly successful artist like Jeff Koons, Cindy Sherman, or Christopher Wool, a corporation may be the best option for you. But for many, it will still make more sense to set up a pass-through business.

To be sure, it is difficult to predict the precise practical impact of the proposed tax code at this stage. But one thing is clear beyond a shadow of a doubt: tax attorneys and accountants will see a lot of new business.