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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."
No taxation without representation. Please vote Spongebob.
If your generating enough income from "virtual worlds" that it needs to be taxed...
Well, taxes are probably the LEAST of your problems.
I meant WOW gold.
Gold hell, do they take wolf pelts?
The IRS only exists in the real world. It should stay there. Otherwise, it could cause a reality breach, and soon find itself the target of thousands of nuclear warheads, tens of thousands of orcs, millions of heavily armed commandos, and a giant green pulsating penis.
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Why do tax stories always bring out the extremists?
Not everybody draws a clean salary. What is your income rate if you are buying and selling virtual goods? Heck, what is your income rate if you're buying and selling real goods? Or if you buy a good and the value goes up, but you haven't sold it yet? What if you're trading goods with value for other goods with value, and it never passes through a cash phase? What if a portion of your salary is drawn against goods that you have on loan to others?
A flat income tax isn't the answer. Forgetting about how it would shift the tax burden to those least able to pay, it would still be a nightmare of bureaucracy anyway. It would just be a different bureaucracy.
Considering the 2008 US federal recipts was in the range of 2.5 Trillion dollars, a cost of 500 million spent dealing with th emoney would be actually only .00002 of the total. That's less than one fiftieth of one percent. That's a monetary transaction cost that any business would love to have, and is a hundred times better than the 2% or so of every transaction that Visa skims off the top.
The ______ Agenda
Yeah, I know those people cheat already, but why make it legal.
So, you're advocating continuing to screw the general public on taxes because you like having a legal basis to punish the wealthy for being wealthy?
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
Taxation of virtual worlds will mean players will have ownership over their accounts (currently trying to monetize your WoW assets is a bannable offence), and fraud and theft in virtual worlds will fall under standard criminal statutes.
Trying to enforce that mess will drain resources from trying to create copyright cops or other nonsense.
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CINC, 4th Penguin Legion
Can I write my WoW characters off as dependencies?
The US constitution doesn't guarantee any of these things. It does, however, create a legislature empowered to raise funds and spend them for the general welfare. And as we live in a democracy, and the vast majority of us support the programs you mention, you're going to just have to suck it up. Or convince us to change our minds: good luck with that.
What's wrong with you? You're not part of the trust fund crowd. Why are you continuing to argue against your own interests?
That's the same line of bullshit that was used to sell us the income tax in the first place. The American people were promised that the federal income tax would only affect the top 1% of earners. Didn't work out that way, did it?
Every "soak the rich" scheme turns into a "soak everybody" scheme in a few years, because of the effects of the even more insidious mode of taxation, which is inflating the currency.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
And as we live in a democracy,
First of all, this isn't supposed to be a democracy, it's supposed to be a republic, and secondly, if you imagine that our government obeys the will of the people, you are sadly deluded.
the vast majority of us support the programs you mention
You're funny.
There was this little incident last year, in which our bought-and-paid-for legislators decided to hand some seven hundred billion dollars over to a bunch of incompetent speculators. This was done despite overwhelming disapproval by the public. In fact, that bitch who purports to represent me in the senate admitted that she had gotten a total of 91,000 calls on the matter, of which 85,000 were against, and she gave a snotty little lecture on the senate floor where she lied through her teeth and claimed that we didn't understand what they were doing.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Is she elected? If she is and is reelected in the next election, then the voters really don't know what they are doing ;).
You do know that every member of the "trust fund" crowd I have ever heard speak on the subject has been in favor of increasing the tax rate on the highest income bracket. Do you know why that is? People who are members of the "trust fund" crowd don't have any "income": none of their money is taxed under income tax.
The truth is that all men having power ought to be mistrusted. James Madison