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Congress to Revisit Virtual Goods Taxation
News.com has the word that congress is set to re-visit taxing virtual goods, a concept they shelved a while back in order to consider the matter more fully. That's given the Congress' Joint Economic Committee time to come to a decision about what exactly the value of virtual goods means for players and game-makers. An economist with the group told CNet to expect their report sometime next month. "What that report will say is unknown, as the committee has kept entirely quiet about its thoughts. However, it's clear that something will happen. 'Given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues,' [senior economist Dan] Miller, who is a fan of virtual worlds and economies, told CNET News.com in December. 'So it is incumbent on us to set the terms and the debate so we have a shaped tax policy toward virtual worlds and virtual economies in a favorable way.'"
Even in the virtual world, you have death and taxes.
If you're going to tax virtual items, why not just use the approach used to eBay, in which you are responsible for tracking and calculating your taxable burden, and reporting it on your tax return? Of course, almost no one will do this, but people have a habit of not paying taxes for what they don't want or need, or view as illegitimate. Which is something the government should have to deal with in a more civilized fashion.
Slashdot: Playing Favorites Since 1997
I can't wait to do tax write offs for giving gold out to newbies.
God spoke to me.
I'll just remit my copper to the IRS via in-game mail. They can use the gold they collect to buy more Fel Iron shells my engineer makes for shipment to the troops in Iraq. That will drive the cost sky high. I'll be rich and can get that elite flying mount soon!
....pay the taxes in virtual money/value and let the government trade it in for something they can use, like virtual weapons of mass destruction or virtual anti-terrorist defence, or for the more domestic spending, virtual road repair, virtual food stamps, virtual housing for the poor, etc...
If the rich don't spend any money, sure, they get a break. But what rich person doesn't spend a lot of money? Sure, they save a lot of money (that's how a lot of them get rich), but they also spend a lot of money.
Remember, savings help the economy, too. Savings are reinvested in economic growth.
FairTax does target some individuals aggressively, sure. But so does our tax system now. Pardon me if I weep for a handful of wealthy people that don't pay any tax now that suddenly will have to pay taxes.
I'd probably pay more in FairTax than I would under Income Taxes, yet I still support FairTax. With FairTax, I can directly control my taxation through spending. Politicians will be unable to alter the taxation rate without it being highly visible. If the tax rate went from 23% to 24%, EVERYONE would see it on EVERY receipt. Right now they can hide tax increases in all sorts of places while simultaneously throwing money back as "tax refunds".
So, not only is the IRS adamant about taxing "all income"
Basically, what is happening here is that someone is saying "I have 1,000,000 hippo bucks" and the IRS is trying to establish some metric of determining how much a "hippo buck" is worth in US dollars so they can tax it. OK, Slashdot: I'm offering those 1,000,000 hippo bucks for sale...who's going to buy them from me and establish the official conversion rate?
Oh wait, nobody because even a billion "hippo bucks" aren't worth anything. So then if I give someone 10,000 of my hippo bucks, has a transaction occured? Choose your own adventure:
Answer YES: Then guess f'ing what...every game of Monopoly is income and so, in aggregate, the population of the US probably owes trillions in unreported income to the IRS for all the games of Monopoly that have been played since its creation.
Answer NO: Then you're instantly smarter than our entire Congress and IRS because you realize that ITS A FREAKIN GAME. As soon as the game is dissolve, said "income" evaporates into thin air. That's the point. Sure, MMORPGs may run a lot longer than your typical game of Monopoly but guess what...if Sony went out of business and Everquest turned off its servers, then what would be left? Nothing but memories and bragging rights...which is all that's really left after a game of Monopoly.
Virtual taxes should be paid in virtual dollars. All the servers and the space the occupy, you know...reality, are already taxed at every possible level. Otherwise, what's to stop the IRS from taxing your score in Pac-Man? Couldn't that spot on the Hi-Score list have value and be auctioned on eBay? (L@@K YOUR INITIALS ON TOP!!! NO RESERVE!) Or how about those packets currently flowing into my computer...don't those have value? If someone idiot buys a single packet from me for $1000, then we are all screwed.
As a closing note, I'm uncomfortable with how easily my analogy about fictional money and invented wealth matches a description of the current US currency system. Hrm. Maybe the entire US banking system is already an MMORPG.
-JoeShmoe
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-- I wonder which will go down in history as the bigger failure: the War on Drugs or the War on Filesharing
in Monopoly money?
Or are they going to tax me for my hotel on Park Place too?
This is the kind of shit that Tories were shot for in 1776. Seems ripe enough time again.
"Flyin' in just a sweet place,
Never been known to fail..."
this makes no sense.
if i sell a virtual item for USD, that is income and it is already taxed.
stocks in a company are 'virtual' and existing in a 'computer simulation'.
non-physical items are nothing new.
the other interpretation is impossibly ludicrous which is to tax items created
and sold in-game with no real-world value. if thats the case then they must
collect the taxes in the form of in-world items.
Tax anytime real world money is exchanged for virtual goods.
If I sell you an item in a game for $50, I would be required to declare that $50 as income for tax purposes.
If I give Linden Labs 100 L$ and get $50 back, I would be required to declare that $50 as income for tax purposes.
It's Apr 15, 1837
You have 14 oxen
Your water barrels are 12% full
You have 2.3 days of rations
You have $43
You have traveled 1349 miles
(H)unt (T)rade (G)o (P)ay Taxes
>G
It's Apr 16, 1837
You have 15 oxen
Your water barrels are 8% full
You have 1.3 days of rations
You have $43
You have traveled 1378 miles
There is a warrant out for your arrest for tax evasion.
(H)unt (T)rade (G)o (P)ay Taxes
>