[1] The annual budget for the National Council for the Arts is set by Congress and currently receives .004% of the total, or US$149.8 million.
Direct awards to organisations and individuals who apply through the National Endowment for the Arts make up the remaining 60% of their annual budget.
As prices for arts and culture related items, events and classes increase, the demand for them decreases.
The ultimate goal in utilising demand-side cultural subsidies is to increase the demand for art at every price level it is offered.
The difference from P1 to P2 is the amount which is compensated by the subsidy, and the total area of from P2, e2 and Q2 is the cultural sector's revenue.
[3] In 2017, the Donald Trump administration proposed to eliminate the National Endowment for the Arts, the US grant-making organization responsible for cultural subsidy provision.
Policymakers in favour of reduced taxes often view cultural subsidies as a non-necessary expense, and one which should be privately, versus publicly funded.
In Australia, there is a current over-supply in the cultural sector which has been supported through supply-side subsidies from the government.