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IRS Eyeballing Virtual World Tax Policies
Kotaku points out a Washington Post report about this year's recommendations from the national taxpayer advocate (an official who suggests improvements and updates to the tax code) which include developing clearer protocols for reporting taxable income from virtual worlds. We've previously discussed the implementation of such policies in China. Quoting the report summary (PDF): "By one estimate, about $1 billion in real dollars changed hands in computer-based environments called 'virtual worlds' in 2005. ... IRS employees have been unable to respond to taxpayer inquiries about how to report transactions associated with them. Economic activities in virtual worlds may present an emerging area of tax noncompliance, in part because the IRS has not provided guidance about whether and how taxpayers should report such activities. To improve voluntary tax compliance, the National Taxpayer Advocate recommends that the IRS issue guidance addressing how taxpayers should report economic activities in virtual worlds."
Which one do you think the US government prefers?
The one that works.
We're already in a spending deficit and people think that taxes are too high. If it were all voluntary, we aren't talking about the military having to cut back, we're talking about the military being unable to muster enough strength to defend ourselves against CUBA. And then suddenly taxes are once again not voluntary.
Control people? That's a ridiculous way of putting it. Oops, sorry, didn't see your tinfoil hat.
What's wrong with you? You're not part of the trust fund crowd. Why are you continuing to argue against your own interests?
Leave morally-loaded words like "punish" out of this. The question is whether a given policy creates a desired result. Progressive taxation has historically produced societies that are happier and more productive in general. Is the abstract idea of a billionare keeping all his unfathomable wealth more important to you than the health, happiness, and dreams of millions?