NationStates Jolt Archive

It seems like people from the Joint Economic Committee think it's a good idea to tax people's virtual properties in games like Second Life or World of Warcraft.

http://secondlife.reuters.com/stories/2006/10/15/us-congress-launchs-probe-into-virtual-economies/

What are your thoughts on this?

EDIT: I forgot to add some commentary.

Commentary: Only an Alliance player could have thought of this. /spit

They. Are. Psychotic.

You can't tax what isn't there. What, are they gonna tax NSG next? *hopes not*

It seems like people from the Joint Economic Committee think it's a good idea to tax people's virtual properties in games like Second Life or World of Warcraft.

http://secondlife.reuters.com/stories/2006/10/15/us-congress-launchs-probe-into-virtual-economies/

What are your thoughts on this?

My thoughts??

HANDS OFF, FUCKERS!!! :mad:

as a tax professional that is mighty interesting to me, I seriously doubt it happens though, the IRS doesn't have enough money to enforce anything so ridiculous.

as a tax professional that is mighty interesting to me, I seriously doubt it happens though, the IRS doesn't have enough money to enforce anything so ridiculous.

But they have the stupidity and stubbornness, oh yes, and fear. They have fear. Like the fucking Spanish Inquisition.

I'm not tax professional, so I'm wondering if someone could clear up one point.

The article discusses virtual economies like the one in Second Life in terms of dollars, but are they talking about taxing actual real world money used in transactions across a virtual economy, or a tax on the virtual money used in a virtual economy, like the gold and silver in World of Warcraft?

I'm not tax professional, so I'm wondering if someone could clear up one point.

The article discusses virtual economies like the one in Second Life in terms of dollars, but are they talking about taxing actual real world money used in transactions across a virtual economy, or a tax on the virtual money used in a virtual economy, like the gold and silver in World of Warcraft?

I wasn't aware that there was real money to be won on World of Warcraft, but to be completely honest I don't play it, with my addictive personality I have decided to steer clear.

I do play Kingdom of Loathing though and rack up meat, I know that the IRS can't tax that because it's imaginary, you know like Monopoly money, but if there were a way for me to cash it out? then they would already have the laws in place to tax that.

I think they are talking about a situation where you have "money" in a game and can cash out (like Moo-la) and they are wanting to tax the money in the game, I really think it's a non-issue legally because it's not really your money until you do cash out, it's not like if you die the online game is going to give it to your heirs, it's not like a bank account.

I think I might email this article to my friend who is over at the IRS and see what they say about it, I mean I laughed but they may have another opinion.

I wasn't aware that there was real money to be won on World of Warcraft, but to be completely honest I don't play it, with my addictive personality I have decided to steer clear.

I do play Kingdom of Loathing though and rack up meat, I know that the IRS can't tax that because it's imaginary, you know like Monopoly money, but if there were a way for me to cash it out? then they would already have the laws in place to tax that.

I think they are talking about a situation where you have "money" in a game and can cash out (like Moo-la) and they are wanting to tax the money in the game, I really think it's a non-issue legally because it's not really your money until you do cash out, it's not like if you die the online game is going to give it to your heirs, it's not like a bank account.

I think I might email this article to my friend who is over at the IRS and see what they say about it, I mean I laughed but they may have another opinion.

You can't really win real money in WoW, but you can sell or buy your money/items/characters on Ebay. Though this is heavily discouraged by Blizzard.

Second Life is a bit different, as you can exchange real money into ingame currency. Though you can't change it back unless you sell items or land against real money/ingame money.

I'm torn.

On one hand, my hatred for pay on-line games is immense, but on the other I despise the idea of taxing stuff. Arrrrrggggghhhhhhh!

But they have the stupidity and stubbornness, oh yes, and fear. They have fear. Like the fucking Spanish Inquisition.

When they taxed my land, and my income I accepted that. They taxed the things I buy, I got over it. But when they come to tax my +3 Keen, Vorpal Rapier, they can pry it from my cold dead hands.

You can't really win real money in WoW, but you can sell or buy your money/items/characters on Ebay. Though this is heavily discouraged by Blizzard.
they can already tax money you make on Ebay, so that's not a problem.


Second Life is a bit different, as you can exchange real money into ingame currency. Though you can't change it back unless you sell items or land against real money/ingame money.
that's interesting, I have to think about that one. It could be possible for them using current tax law as precedent to tax that.....

If they're going to tax items you own in a game then surely they'll have to implement No. 3 (http://www.pointlesswasteoftime.com/games/wowworld.html) on this list.

I wasn't aware that there was real money to be won on World of Warcraft, but to be completely honest I don't play it, with my addictive personality I have decided to steer clear.

I do play Kingdom of Loathing though and rack up meat, I know that the IRS can't tax that because it's imaginary, you know like Monopoly money, but if there were a way for me to cash it out? then they would already have the laws in place to tax that.

I think they are talking about a situation where you have "money" in a game and can cash out (like Moo-la) and they are wanting to tax the money in the game, I really think it's a non-issue legally because it's not really your money until you do cash out, it's not like if you die the online game is going to give it to your heirs, it's not like a bank account.

I think I might email this article to my friend who is over at the IRS and see what they say about it, I mean I laughed but they may have another opinion.
The article mentions there are laws in place for taxing a cash-out, which is why I'm a little confused. The real-world transactions I'm talking about sometimes occur when a player will pay real money for a virtual item (just check E-bay) or even a character account. Those transactions probably are already taxed, but if they aren't then those might be what the article refers to.

The language that has me concerned is in this section of the article:

SECOND LIFE, Oct 15 (Reuters) - Booming virtual economies in online worlds such as Second Life and World of Warcraft have drawn the attention of a U.S. congressional committee, which is investigating how virtual assets and incomes should be taxed.

“Right now we’re at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise — taxes, barter exchanges, property and wealth,” said Dan Miller, senior economist for the Joint Economic Committee. “You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there’s no mechanism by which you’re taxed on this stuff,” he said.


They seem to be referring to the actual game money used and in-game property, calling it virtual assets. It would be like trying to tax the meat in Kingdom of Loathing, if I'm reading that right.

The Americans rejected the rule of the English king because he was taxing everything to death and now what's the USA nation doing? Taxing everything it can get it's hand on too.

The article mentions there are laws in place for taxing a cash-out, which is why I'm a little confused. The real-world transactions I'm talking about sometimes occur when a player will pay real money for a virtual item (just check E-bay) or even a character account. Those transactions probably are already taxed, but if they aren't then those might be what the article refers to.

The language that has me concerned is in this section of the article:
they can tax you if you barter now....yeah, it sucks. The whole Ebay thing is similar to a bartering situation even if no "real money" exchanges hands.



They seem to be referring to the actual game money used and in-game property, calling it virtual assets. It would be like trying to tax the meat in Kingdom of Loathing, if I'm reading that right.
I seriously doubt that happens, but I see what they think they are saying. It would in reality (not virtual world) be like them taxing me for my holdings in Monopoly.....it's ridiculous.

Quite, quite mad.

Especially seeing as many on-line games expressly forbid exchanging in-game items for real-world money.

What're they going to do, tax transactions in, say, Eve Online, then horde their taxed ISK and use it to buy Battleships and Tech II goodies for the impoverished?
Which nation gets to tax which player?

The in-game items only have a value when they're exchanged for real-life money, and as that income can be taxed anyway there's no need to do anything else.

It seems like people from the Joint Economic Committee think it's a good idea to tax people's virtual properties in games like Second Life or World of Warcraft.

http://secondlife.reuters.com/stories/2006/10/15/us-congress-launchs-probe-into-virtual-economies/

What are your thoughts on this?

EDIT: I forgot to add some commentary.

Commentary: Only an Alliance player could have thought of this. /spit

WTF!!??

Right now, Im just trying to figure out what could lead you to be charged with tax fraud :rolleyes:. Theres always an interest where the government could be making money, but isnt. I still wait with interest to see what future impact the internet will have on politics.

the USA government should get their filthy paws off all this internet stuff. It's the world wide web, not the America wide web.

Maybe someone on the committee plays these games and snapped after being owned by PKs with super-rare items they bought with cash.

the USA government should get their filthy paws off all this internet stuff. It's the world wide web, not the America wide web.

This is yet another reason for me to consider moving elsewhere. I mean, how the HELL can you even concieve of taxing something that doesn't exist? It's like they're saying "Hey look, here's a way to take more money for ourselves from hardworking Americans! Let's get jiggy with it!"

It seems like people from the Joint Economic Committee think it's a good idea to tax people's virtual properties in games like Second Life or World of Warcraft.

http://secondlife.reuters.com/stories/2006/10/15/us-congress-launchs-probe-into-virtual-economies/

What are your thoughts on this?

EDIT: I forgot to add some commentary.

Commentary: Only an Alliance player could have thought of this. /spit

That would be as stupid as taxing people for playing NationStates. And taxing the larger populations higher.

But I'm getting used to "conservatives" and "capitalists" in the US whose main motive seems to be increasing the size of the government by allowing it to tax absolutely everything and everyone.

From what I've been able to interpret, what they're concerned about is transactions made in "vitual economies" that are based on hard currencies. (ie 'buying' a sword for 5K gold from another player and depositing say $20 into that players paypal account.)

From what I've been able to interpret, what they're concerned about is transactions made in "vitual economies" that are based on hard currencies. (ie 'buying' a sword for 5K gold from another player and depositing say $20 into that players paypal account.)

...uh...wouldn't that constitute personal transactions and thus not be taxable worth a damn because it's not a fixed income like a job? Kinda like how babysitting jobs are never taxable, or a friend loaning a friend five dollars, and stuff like that?

Actuaully, all income is taxable. Everyone just lies about it and we all move on. :D

It's getting better:

Track Users (http://news.com.com/FBI+director+wants+ISPs+to+track+users/2100-7348_3-6126877.html?tag=nefd.top)

And i saw an article earlier, cannot find it now, that mentioned that the EU wanted to regulate all video content on the Net. Fortunately for all you living in Europe, the british governenment is fighting the idea.

Hey, this probably isn't so bad. What's the worst that could happen? The US Government makes a character on WOW, and you're required to trade to them (for nothing in return) 20% of whatever you collect off the corpses of the dead monsters. I mean, they might even accept the random bat wings and stuff so you don't have to go through a merchant. It's only fair that they tax you via the same medium you get paid in, right? The guy (or gal) could stand right next to the mailbox in Ironforge.

...uh...wouldn't that constitute personal transactions and thus not be taxable worth a damn because it's not a fixed income like a job? Kinda like how babysitting jobs are never taxable, or a friend loaning a friend five dollars, and stuff like that?

In the US babysitting jobs are taxable, loans are not because you pay the money back.

In the US babysitting jobs are taxable, loans are not because you pay the money back.

...so my sister is going to be taxed in a few years for her babysitting job? What the bloody HELL?!

This is ridiculous. If they learned how to spend money appropriately they could do so much more with so much less than what they take already. Geez. For one thing, they could stop spending so much on the military and start spending a lot more on education. I hope they realize that when their beloved CEOs and executive boards and all those higher ups in their corporations die there will be no one to replace them because all the people that could have didn't get a proper education! UGH.

Urge to go into politics rising...

If they implement this, I will personally go to their houses and poop in every pair of shoes I can find.

Then I'll insist they pay me, since they seem so dead-set on making us hand out money for shit.

...so my sister is going to be taxed in a few years for her babysitting job? What the bloody HELL?!

This is ridiculous. If they learned how to spend money appropriately they could do so much more with so much less than what they take already. Geez. For one thing, they could stop spending so much on the military and start spending a lot more on education. I hope they realize that when their beloved CEOs and executive boards and all those higher ups in their corporations die there will be no one to replace them because all the people that could have didn't get a proper education! UGH.

Urge to go into politics rising...

if your parents claim her as a dependent she can't make more than her exemption or she will be required to file an income tax return.

if your parents claim her as a dependent she can't make more than her exemption or she will be required to file an income tax return.

...WHY? It's a bloody babysitting job! Something she's doing as a favor to someone else in exchange for a small amount of money. A personal loan, if you will, paid back by the babysitting.

Urge to found new political party rising...

...WHY? It's a bloody babysitting job! Something she's doing as a favor to someone else in exchange for a small amount of money. A personal loan, if you will, paid back by the babysitting.

Urge to found new political party rising...

you could say that about any job, for example I do taxes as a favor for a small amount of money, a loan repaid by me doing their taxes.

income is income.

if that bothers you, why don't you go to Irs.gov and download the pub 17 and see where it says in there that you have to claim and pay taxes on money obtained illegally.....yep, and you know what? self employement taxes too, drug dealers have to pay taxes on their drug money. *

*most of them don't but they are supposed to.

you could say that about any job, for example I do taxes as a favor for a small amount of money, a loan repaid by me doing their taxes.

income is income.

if that bothers you, why don't you go to Irs.gov and download the pub 17 and see where it says in there that you have to claim and pay taxes on money obtained illegally.....yep, and you know what? self employement taxes too, drug dealers have to pay taxes on their drug money. *

*most of them don't but they are supposed to.
...wait, hang on. Are you saying that being paid for a babysitting job is illegal income? Isn't there some kind of exception for age, here? I mean, would you tax a twelve year old for the money he makes selling lemonade at a lemonade stand?

Note to self: I really should look up all sorts of tax laws. Would help me be more educated. Not to mention help me figure out how to turn them all inside out.

I'm not tax professional, so I'm wondering if someone could clear up one point.

The article discusses virtual economies like the one in Second Life in terms of dollars, but are they talking about taxing actual real world money used in transactions across a virtual economy, or a tax on the virtual money used in a virtual economy, like the gold and silver in World of Warcraft?

Maybe they'll start taxing the Gold Farmers.

...wait, hang on. Are you saying that being paid for a babysitting job is illegal income? Isn't there some kind of exception for age, here? I mean, would you tax a twelve year old for the money he makes selling lemonade at a lemonade stand?

Note to self: I really should look up all sorts of tax laws. Would help me be more educated. Not to mention help me figure out how to turn them all inside out.

no, babysitting is not illegal, although actually depending on your laws in your state, it might be illegal for her to watch children outside her own family without a license....

I am saying that ALL income is taxable, even if some criminal defrauds an old woman and gets $50 it's taxable.

and yes you should read up on tax laws.

Like I said start with the Pub 17

about lemonaid stands, you can make up to your exemption without oweing tax if your parents claim you as a dependent, the exemption for a kid last year was $3,050 so they can make that much and be okay, but anything more and they might owe tax. You should always file if you are required to file whether you owe tax or not.

as a tax professional that is mighty interesting to me, I seriously doubt it happens though, the IRS doesn't have enough money to enforce anything so ridiculous.

Since Bush came into office the IRS enforcement policy, and budget allotments, have shifted from the cases that give a return of hundreds of thousands of dollars to one (corporate tax schemes) onto cases that give back small fractions, or even loose money (working class people mistakenly, or even just suspiciously claiming an EIC. In some cases, suspicion means 'tax returns from the Bronx').

It's part of his vision of an "ownership society." i.e. If you own stuff you're part of society. If you work for stuff, you work for society. That's why when newspapers had 'society pages,' bricklayers, factory workers, and garbage men weren't in them.

Since Bush came into office the IRS enforcement policy, and budget allotments, have shifted from the cases that give a return of hundreds of thousands of dollars to one (corporate tax schemes) onto cases that give back small fractions, or even loose money (working class people mistakenly, or even just suspiciously claiming an EIC. In some cases, suspicion means 'tax returns from the Bronx').

It's part of his vision of an "ownership society." i.e. If you own stuff you're part of society. If you work for stuff, you work for society. That's why when newspapers had 'society pages,' bricklayers, factory workers, and garbage men weren't in them.
In defense of the IRS (OMG, did I just say that?!) up until the crackdown in 2000, there was a LOT of EIC fraud, and they were losing a LOT of money to it, there really hasn't been that much of a slow down in corporate audits so much as a rising in audits with suspicious claims for EIC, which a lot of the people who do that mess with their schedule C so it turns out to be a lot of people that claim to be self employed who get looked at more closely.