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.' "

Comments

Kiss and attempt to tax my VIRTUAL

[davidsyes]

ASS. Maybe there ought to be a category for shitty assets. Then, the IRS would have to create a new category. I'm sure they'll come up with euphemisms... SO, rename chair to shit-foundation-seat, etc... why not create a shitty situation for a shitty situation?

And, for the jobless who play these games (I don't; don't have job yet, and no money to play these games even if I were interested...), are they self-employed. I guess the IRS would class them as what, "self-employed professional gambler"? Sounds like a destructive life style for the losing of the gamblers.

Captcha: "compute" (doh!)

Is ... Is not

[Oligonicella]

For a while, I've read posters whining that the virtual world they frequent is just as real as the world outside. Now that the outside wants to intrude, they're whining it isn't. Rich and delightful.

Re:Taxes suck, but why not?

[tolan-b]

[citation needed]

There is no DIRECT UNAPPORTIONED TAX!!

[scorp1us]

Article 1 section 2:
Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons

Article 1 section 8:
8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

16th amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

If you keep flipping back and forth, between article 1 section 2 and the 16th amendment, you see that the 16 amendment conferred no new power or created no new tax!!

"The income tax is, therefore, not a tax on income [earnings] as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax."
F. Morse Hubbard, Treasury Department legislative draftsman. House Congressional Record March 27th 1943, page 2580

"...the requirement to pay [excise] taxes involves the exercise of privilege."
United States Supreme Court, Flint vs. Stone Tracy Co. 220 U.S. 107 (1911)

"We are of opinion, however, that the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it..."
"[Taxation of "income" is] in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it" (That is, if the "income" tax ever comes to be administered as something other than an excise, or on something unsuited to an excise, the rule of apportionment must be applied.)
United States Supreme Court, Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916)

"The provisions of the Sixteenth Amendment conferred no new power of taxation . . ."
United States Supreme Court, Stanton v. Baltic Mining Co., 240 U.S. 103 (1916)

"The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects..." United States Supreme Court, Peck v. Lowe, 247 U.S. 165 (1918)

Learn more, better than I can explain it myself.