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Taxing Virtual Gaming Assets
rijit writes " It appears very likely that taxation of online games assets is inevitable. Quote: 'That's because game publishers may well in the not too distant future have to send the forms — which individuals receive when earning nonemployee income from companies or institutions — to virtual world players engaging in transactions for valuable items like Ultima Online castles, EverQuest weapons or Second Life currency, even when those players don't convert the assets into cash.' "
The English, French, and American Revolutions were all instigated partly by new or opressive taxes
Not only is this a good idea, but this is what's happening now. Your virtual assets are worthless till you sell them for dollars. When you receive those dollars, that's a taxable event.
The IRS openly indicates in publication 525 that, "If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year you return it to its rightful owner." The same applies to accepting bribes. You can read it here. Basically, it doesn't usually matter how you receive income, it's taxed.
The Chairman of the Joint Economic Committee agrees with you.
If you actually read tax cases and full court decisions, you will understand that all this tax protestor crap is just gibberish caused by taking tiny quotes from old tax decisions, combining them with odd semantic arguments, and trying to weave them together into some incoherent whole that flies in the face of common sense.
Basically, the term "Direct" tax does not mean what you think it means. A "direct" tax is a tax on property, an "indirect" tax is a tax on commerce, consumption or trade. This is backed up by the full text of several Supreme court decisions and The Federalist papers, which may be relied upon to help understand the frame of mind, and/or terminology of, the authors of the constitution. (Some district courts didn't understand this in the text of their decisions, but the Supreme Court decisions override those in any case.)
"Direct" does not refer to how the tax is collected. (From a taxpayer directly vs. paid for by somebody else.) That would be stupid to even mention in the constitution, as the collection method of a tax is rather irrelevant when it comes to whether or not it is legal.
As far as the "The 16th amendment created no new power to tax."... Using this as a reason to say that income taxes are unconsitutional is silly in the extreme. The 16th amendment clearly states that income, from whatever source derived" is taxable. If the 16th amendment created "no new power to tax", and it plainly states that income is taxable, it would imply that the income tax was constitutional before, and after, the 16th amdendment was ratified.
Google for "Tax Protestor FAQ" for full details.
SirWired
Lot of people think income taxes are stupid...Mostly they are people who makes lots of money.
The alternative to income taxes would be federal sales tax, which is generally considered to put an undue tax burden on people who don't make a lot of money...eg, the rich man and the poor man buy a loaf of bread, and the 30 cents tax on the bread that goes to the Fed means nothing to the rich man, but means a lot to the poor man.
I suppose that you could add heavy taxes on luxury goods to "even out" the tax burden, but that's not exactly fair to the middle class (my new flat screen is gonna cost WHAT?!), and it puts luxury goods completely out of reach for poorer families.
Taxes are there to provide services for the whole of the population, whether it's paying for the military to protect our borders, and the police to protect our homes, or paying to clean up toxic waste spills, or paying for the interstate system, etc. People who demand "a la carte" government services always annoy the crap out of me, because they're always the people who refuse to see the point in anything that doesn't benefit them in a big tangible sort of way.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Yes, yes it is, exactly.
From the IRS page on Narcotic-Related Investigations...
When the Internal Revenue Service astounded Public Enemy Number 1, Alphonse Capone by obtaining a conviction for tax evasion and demanding millions of dollars in back taxes, Capone said, "They can't collect legal taxes from illegal money." But it's really pretty simple: No matter what the source of income -- all income is taxable.Even more important than the income taxation issues, are the money transfer ones.
When money changes hands, banks and other institutions must report on both sides of the transaction. In game, at present, that doesn't happen. In could transfer in-game assets to someone as payment. In simplistic sense, I could hand "dirty" cash to someone and they could pay me in "game" assets. When I sell those assets, I now have "clean" money. The the cash could then be paid in small quantities to individuals to transfer smaller sets of funds back to the main player as in-game assets.
You could complicate that and hide it behind a few more cutouts, but that's the essential way to do money laundering like this. Of course, it could also be done as a massive number of people getting cash (say, $200 each) to buy in game assets then each transfer those assets to a counterpart in a similar pool of people at the far end, who sell the assets and now have the cash. They in turn buy other assets and repeat the transaction in reverse to a different member of the original pool and you close the circle. The more 'steps' it takes in the process, the harder to track.
You can (and people do) do the same thing in real life but the assets themselves either don't exist (which can be ultimately caught) or else are expensive and cumbersome enough to make the friction expensive. In virtual worlds it can be scripted and kept purposely obscured by a random seeming level of interaction among a large volume of players.
If these economies are going to be getting "real" then the controls on them will have to as well.
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
What are you talking about? Have you ever filled out tax forms? When you sell stock, you fill in the 1040 Schedule D form with the number and type of shares, the sale price, and the "basis" (which is how much it cost you to buy them). Both these values include the transaction fees, so if you buy $10 of stock and E*TRADE charges $20 to perform the trade, your basis is $30. Then when you stupidly sell the stock for the same $10, and E*TRADE charges another $20 to perform the trade, your sale price is -$10. The difference is -$40. So you report a loss on your 1040 form for capital gains.