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Lawmakers Trying to Head Off Massive Taxation
An anonymous reader writes to mention a Reuters article about a lawmaker's attempt to stop the Government's interest in taxing Massively Multiplayer Game content. R-New Jersey Jim Saxton is cautioning against exploring the taxable status of in-game items. From the article: "'The goal of the forthcoming Joint Economic Committee study is to help lawmakers understand the issues involved and head off any premature attempt to impose a tax on virtual economies,' he said. Under current law, Saxton said if a transaction takes place solely within a virtual world there is no 'taxable event.' Dan Miller, chief economist for the Joint Economic Committee, said earlier this week that the committee's study would start with a blank slate and be completed by the end of the year."
I don't play, so I could be way off on this analogy. I'd like to think of it like savings bonds. They accrue interest, but you only get taxed when you cash out. You can inherit them, pass them around, give them away, whatever, they're only worth is paper until you cash them. Thus, people trading in game things should only get taxed if they cash out.
What I'd be concerned about is if they start letting the IRS audit our virtual characters, where does it end? Can we declare bankruptcy if a character gets erased? Can I use my in game assets as collateral towards a loan: would the bank accept my +3 Sword of Fiery Death if I default on my Prius loan? Can I take a mortgage out on a castle? A second mortgage?
If they crack the floodgates, expect the impending flood. There's people smart enough to abuse the system and they will and Congress is just going to look more stupid as they patch up their VIRTUAL tax laws to prevent abuse.
Plus the headlines would be hilarious. 'Man declares bankruptcy after virtual character stolen' "My house loan was dependant on my online estate.!"
They tax me for social security and I'm not going to see a damn penny of that.
If the IRS accepts payment in game plat, gold, credits, isk, etc...
Steve's Computer Service, Hobbs, NM