Topic: US: Virtual economies attract real-world tax attention: WTF?  (Read 5802 times)

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Offline Acidrain2

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US: Virtual economies attract real-world tax attention: WTF?
« on: October 24, 2006, 01:56:59 am »
Virtual economies attract real-world tax attention: WTF?

LONDON (Reuters) - Users of online worlds such as Second Life and World of Warcraft transact millions of dollars worth of virtual goods and services every day, and these virtual economies are beginning to draw the attention of real-world authorities.

"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 of the U.S. Congress.

Read on...................

--------------------------------------

You are going to be outraged by this article, this is simply nuts! When the IRS in the first is unconstitutional an illegal Dept in the US though those that keep the Americans blind to the real facts! Currently, those in the Congress are looking into the legality of the IRS. But this is just outragoius!

Cheers,

Acidrain

Offline GE-Raven

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #1 on: October 24, 2006, 07:58:26 am »
LOL... of course the government DESERVES money... how dare we not give them their fair share.

WOW I hate Socialism.

GE-Raven

Offline Commander Maxillius

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #2 on: October 26, 2006, 12:10:58 pm »
I find that stupidity on this scale is best spoken of in leet.


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Offline Just plain old Punisher

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #3 on: October 26, 2006, 06:49:36 pm »
Only when you convert your virtual assets into real money should you get taxed.

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Offline Soliton

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #4 on: October 26, 2006, 07:33:16 pm »
LOL... of course the government DESERVES money... how dare we not give them their fair share.

WOW I hate Socialism.
Taxes are not something unique to more sociailst governments (and I do have to ask what you mean by socialism as so many do not understand what that means). And just how do you think government is supposed to operate without funds? Government is necessary; without it all the other stuff that you probably think is so wonderful probably wouldn't have happened.

We are the government. We pay taxes to make it run and we also have the responsiblity to make sure it runs properly, something that isn't happening recently. That doesn't mean we should do away with government, as if that does happen, the things done by government will be then be done by private interests, aka Fascism.

If you hate government, then you can do something about it; move off to some undeveloped part of the world and live as you see fit without paying any taxes to anyone. I've heard Somalia is nice. It's totally up to you and totally doable, so go for it.

Offline Iceman

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #5 on: October 26, 2006, 09:45:25 pm »
Only when you convert your virtual assets into real money should you get taxed.

Agreed. However, things like WoW, or Dynaverse (you earn prestige, don't you?) being taxed would be insane.
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Offline Acidrain2

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #6 on: October 26, 2006, 11:47:11 pm »
Why use Socalism when most dont understand what that really means. In the US we arent socalist, unlike most of Europe and its governmental entitlements programs. Iam not saying the US doesnt have entitlement programs but not in the same sense as that of the example of Europe.

I think this tactic is an abuse of power by an government agency within the US that in my view is an illegal part of government and i would say that in the 10yrs we will hopefully see it go bye, bye. I think the IRS is rather unconstitutional and is being debated within the circles of the Constitutionalist in the US at the moment and a movement to go towards a flat tax which eliminates the IRS.

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Offline Soliton

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #7 on: October 27, 2006, 12:32:35 am »
I think the IRS is rather unconstitutional and is being debated within the circles of the Constitutionalist in the US at the moment and a movement to go towards a flat tax which eliminates the IRS.

How would a flat tax eliminate the IRS? Someone still has to collect it and go after those who aren't paying. Never mind that a flat tax ends up being a tax increase on the poorest. If you think that people should pay taxes on the honor system, then why is there already trillions of dollars in untaxed money being hidden offshore?

http://www.motherjones.com/news/feature/2000/11/offshore.html
Quote
It's a steamy mid-July morning and we're sitting in Honess' office at Jerome E. Pyfrom & Co., a law firm in Nassau, capital of the Bahamas, one of the world's premier "offshore" financial havens. Pyfrom & Co. specializes in setting up secret bank accounts that allow people to hide their funds -- from tax collectors, law enforcement authorities, creditors, or anyone else who might have a claim on their cash. Some experts estimate that more than $5 trillion is now hidden in offshore accounts. I've come to the Bahamas to investigate what kind of financial services are available to wealthy Americans eager to bury their riches abroad. Since my own resources are modest, I tell Honess I've grown rich as a NASDAQ trader and am sick and tired of being "taxed to death" by the U.S. government. How can Pyfrom & Co. be of assistance? I ask.


If the richest of the rich don't pay the taxes, then the taxes will come out of your paycheck. The uber-rich would rather see you starve than pay their fair share. To them it's asswipe money, to you it's you rent or mortgage. If the government can't get the money needed from uber-rich, the government willl get it from you.

Offline Vipre

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #8 on: October 27, 2006, 03:51:16 am »
I wonder how the IRS would respond when I sent them a payment check made out for XX.XX Linden dollars?

Or how they would respond when I request a payment extention so I can hunt down a red dragon in NWN to cover my tax bill.

If either seems a stupid question, it's because duh they are.

Can you imagine having been taxed based on how much gold you had in your Ultima Online shard bank account?

As long as the value stays virtual it should be considered a video game. You should be tax liable if you trade virtual items, money or services for real life money. It's called income tax isn't it?

If some guy sells me a real life Corvette for 50,000 Simoleons in Sims2 that doesn't make the seller a tax evader, it makes him an idiot.

 :rofl: Everyone in Washington DC deserves to be fired that even considers this.



Edit: To add missing word
« Last Edit: October 27, 2006, 04:26:14 am by Vipre »
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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #9 on: October 27, 2006, 08:10:42 am »
Well now that we are firmly in H&S territory...

You want fair?  Flat sales tax 9-10% would be fine.  No need for IRS as every single exchange of goods or service would be taxed.  Sure you would still have a small department to collect it and manage it... but it would be about 100th the size of the IRS, as there would be no need for lawyers, etc...

Socialism is legalized theft by the government to "force" charity.  I would agree that America has fought against much of it... however we are still very much a welfare state.

Socialism is fine at the local level... as a matter of fact most good churches are socialistic.  However they rely on donations.... not theft.

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Offline Commander La'ra

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #10 on: October 27, 2006, 11:29:27 am »
Erm...

...anyone else think they're talking about the folks who make money off 'virtual' goods?  IE:  You level up several characters on a WoW account, and sell it?  Or pillage rare IG items and sell them for real cash?

That's unreported income, in most cases, which is probably why the IRS is looking into it.  Not saying that's a good thing...I just don't think they're going to be taxing SWG creds. :D
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Offline Just plain old Punisher

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #11 on: October 27, 2006, 04:59:12 pm »
Erm...

...anyone else think they're talking about the folks who make money off 'virtual' goods?  IE:  You level up several characters on a WoW account, and sell it?  Or pillage rare IG items and sell them for real cash?

That's unreported income, in most cases, which is probably why the IRS is looking into it.  Not saying that's a good thing...I just don't think they're going to be taxing SWG creds. :D

Unreported income will generally stay unreported. A couple of hundred bucks every year isn't worth pursuing, since it costs more to investigate than you get back in taxes.

You know, I've come to the conclusion that we pay enough in taxes. It would seem that I pay nearly 50 percent in income to taxes. If every once in awhile, I can get away with a couple hundred bucks of tax free income, I say bring it on. The f*cking greedy federal and state governments take enough of my money.

That's why I voted no for every single bond proposal and ANYTHING that would have spent money this election year. Screw the schools, screw the roads, screw everything that's going to cost a lot of money. I'm tired of them taking money for crap I don't want, don't need, and will never use.

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Offline Vipre

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #12 on: October 27, 2006, 05:05:31 pm »
Erm...

...anyone else think they're talking about the folks who make money off 'virtual' goods? IE: You level up several characters on a WoW account, and sell it? Or pillage rare IG items and sell them for real cash?

That's unreported income, in most cases, which is probably why the IRS is looking into it. Not saying that's a good thing...I just don't think they're going to be taxing SWG creds. :D


Well I the article did mention assessing the value of virtual assets

"you can have a virtual asset and virtual capital gains, but there's no mechanism by which you're taxed on this stuff"  << No mention
of real world interaction here

"people who cash out of virtual economies by converting their assets into real-world currencies are required to report their incomes
to the U.S. Internal Revenue Service or the tax authority where they live in the real world."  << Perfectly reasonable

"It is less clear how to deal with income and capital gains that never leave the virtual economy" <<WTF people, it's a video game.
Also this directly addresses the "virtual income" such as collecting "Goldpieces" in a MMORPG such as Ultima Online or EVE Online or
Star Wars Galaxies.


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Offline Soliton

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #13 on: October 27, 2006, 05:33:34 pm »
You want fair?  Flat sales tax 9-10% would be fine.  No need for IRS as every single exchange of goods or service would be taxed.  Sure you would still have a small department to collect it and manage it... but it would be about 100th the size of the IRS, as there would be no need for lawyers, etc...

Socialism is legalized theft by the government to "force" charity.  I would agree that America has fought against much of it... however we are still very much a welfare state.

Socialism is fine at the local level... as a matter of fact most good churches are socialistic.  However they rely on donations.... not theft.

Maybe I react so negatively to such comments as I read them as the person saying they hate taxes as hating this country. This country was built on people paying their fair share for the last two hundred years, and now so many want to cash out that long term investment just for themselves rather than keep paying their fair share so that there will be a good country for generations to come. When given the choice between keeping our country going or their selfishness, they pick selfishness.

Taxes aren't theft, that notion is just stupid. Paying taxes, paying your fair share for the good of your country, is the most patriotic thing to do as without funds our government doesn't run. Those that move mountains to dodge paying their fair share (especially those who can more than afford to pay) are betraying their country.

If you want to complain that you are being overly taxed, then fine, but the money has to come from somewhere. The current policies are letting the most able to pay off the hook for their fair share, so governments will then start looking for other sources. Which is why they are looking into this online money stuff.

Organized religion has zero accountability, trusting it to provide social services would be incredibly dumb. And if you do think such services are needed, then why not run them in public, so that the money spent can be accounted for and that waste or mismanagement can be addressed, why trust some daddy-figure to do it all for you without any oversight? And counting on donations is a silly way to fund anything necessary, never mind that donations to charities are way down recently because of the changes in the tax law, specifically the inheritance tax.

I recognize the libertarian argument inherent in all of this, and the core idea in libertarianism is one of wanting someone else to both pay for and run the necessary things while the libertarian gets to run off and play with no worries at all. They expect everything to be like it was when they were five years old, that their benevolent parents just make all the good stuff happen like magic.

And for the flat sales tax nonsense:

The 23 Percent Solution?

Offline Sirgod

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #14 on: October 27, 2006, 06:09:25 pm »
Actually, teaxes where not part of the begginings of America. In fact getting them at all was very hard to do. http://www.uic.edu/depts/lib/documents/resources/tax99/taxhistory.shtml

Taxes imposed on American colonists by the British helped to persuade Americans to seek independence. In 1766, America's "Stamp Act Congress" protested British taxes on American newspapers, business licenses, diplomas and legal documents. Because American colonists had no representatives to protect their interests in Parliament, they fell victim to "taxation without representation." Americans so hated taxes that when the first Congress of the United States was created under the Articles of Confederation, it had no power to levy taxes. Not until 1789 was Congress given the power to tax American citizens.

In 1792, the American government imposed an excise tax on whiskey. This first American sin tax sparked a rebellion in Philadelphia, called the "Whiskey Rebellion." Another tax, in 1832, may have been a contributing factor to the Civil War. Known as the "Tariff of Abomination," the Morrill tariff was the highest tariff in American history, adding a 47-percent markup to prices of imported goods. Since the primarily agricultural South needed more imported goods than the industrial North, the tariff hit Southerners hard while benefitting sales for Northern manufacturers. Most of the money generated by the tariff was spent on Northern projects and needs.

In 1798, Congress levied the first direct tax on American property, including lands, houses and slaves. Temporary income taxes were also imposed on citizens by both sides of the Civil War in order to raise wartime funds, and in 1862 the Office of the Commissioner of Internal Revenue was created to collect wartime income tax funds. The first peacetime income tax was imposed in 1894, a 2-percent tax on earnings above $4000, which at that time only affected the very richest 2-percent of Americans. Income taxes became a permanent feature of American life in 1913, with ratification of the 16th Amendment. Taxes were expanded during World War I with revenue acts which created federal estate taxes as well as greater taxes on earnings by individuals and businesses.

The rise in taxes in American life has led to increasing searches for loopholes and other means of escape. In the 1960's, the tax-free Cayman Islands began to be used as a haven from the IRS. In 1996, the flight of wealthy Americans abroad caused Congress to pass a law prohibiting reentry to the U.S. for former American citizens who abandoned their U.S. citizenship to avoid paying taxes.

----------------------------------------

As mentioned above, the first Peace time Tax was imosed upon us in 1894. I have to side with Raven on this, as If it where up to me, I'd give great consideration to repealing the 16th amendment.

BTW, Let's please keep this civil, as I will allow a conversation to continue here, But If it starts to get crass, It will be moved to H&S.

Stephen
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Offline Commander Maxillius

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #15 on: October 27, 2006, 10:37:09 pm »
Come to think about it, I'm open to the idea of taxing you in game worlds.  The law should be written that in order to have to pay, you must be defeated in battle in that game world.

Collect from the n00bs while the 133+ prosper!  And I'll be damned if the f--king IRS repos my H-XFE!
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Offline Skawpya

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #16 on: October 31, 2006, 01:38:44 pm »
Hate to say it, but this should have been expected. In second life, some people are already making a living on services and goods provided in there, and as time goes on, more will, there and elsewhere. The suprise part I'm seeing here stems from the idea that something made purely of information on some server has no value. While I can understand that, if a virtual object requires a set of skills you have to learn to make it, time to do so, and is valuable enough that someone is willing to buy it in sufficient quantities to make taxation look feasible, how are those skils and object any less real than one is made of matter, not information? The same goes for services.

In the future, other servers like second life will appear and also provide growing economies that some can make a living off of. Yet another reason to implement a universal sales tax and drop most of the others, as I dont see that any other form of taxation could keep up with the ongoing changes to virtual worlds and the economies inside them.

Offline Soliton

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #17 on: October 31, 2006, 06:02:31 pm »
In the future, other servers like second life will appear and also provide growing economies that some can make a living off of. Yet another reason to implement a universal sales tax and drop most of the others, as I dont see that any other form of taxation could keep up with the ongoing changes to virtual worlds and the economies inside them.
Nevermind the impracticality of a national sales tax funding everything in lieu of all other taxes, but do you think that governments would be considering taxing things like this if they were running a surplus or just meeting their needs with the current tax schemes?

Offline Sarek

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #18 on: November 01, 2006, 10:19:31 am »
In the future, other servers like second life will appear and also provide growing economies that some can make a living off of. Yet another reason to implement a universal sales tax and drop most of the others, as I dont see that any other form of taxation could keep up with the ongoing changes to virtual worlds and the economies inside them.

Nevermind the impracticality of a national sales tax funding everything in lieu of all other taxes, but do you think that governments would be considering taxing things like this if they were running a surplus or just meeting their needs with the current tax schemes?



Yes because politicians are like crack addicts, their needs consume whatever funds they can get their hands on.  The economy is bad?  Spend more to help people cope.  The economy is bad?  Create more social programs with the surplus.  Spending tax money is how politicians buy votes and maintain their power. 


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http://www.boston.com/news/nation/articles/2006/10/30/w_va_weighs_record_term_for_byrd/
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Offline dragoon

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Re: US: Virtual economies attract real-world tax attention: WTF?
« Reply #19 on: November 08, 2006, 05:24:53 pm »
Actually, teaxes where not part of the begginings of America. In fact getting them at all was very hard to do. http://www.uic.edu/depts/lib/documents/resources/tax99/taxhistory.shtml

Taxes imposed on American colonists by the British helped to persuade Americans to seek independence. In 1766, America's "Stamp Act Congress" protested British taxes on American newspapers, business licenses, diplomas and legal documents. Because American colonists had no representatives to protect their interests in Parliament, they fell victim to "taxation without representation." Americans so hated taxes that when the first Congress of the United States was created under the Articles of Confederation, it had no power to levy taxes. Not until 1789 was Congress given the power to tax American citizens.

In 1792, the American government imposed an excise tax on whiskey. This first American sin tax sparked a rebellion in Philadelphia, called the "Whiskey Rebellion." Another tax, in 1832, may have been a contributing factor to the Civil War. Known as the "Tariff of Abomination," the Morrill tariff was the highest tariff in American history, adding a 47-percent markup to prices of imported goods. Since the primarily agricultural South needed more imported goods than the industrial North, the tariff hit Southerners hard while benefitting sales for Northern manufacturers. Most of the money generated by the tariff was spent on Northern projects and needs.

In 1798, Congress levied the first direct tax on American property, including lands, houses and slaves. Temporary income taxes were also imposed on citizens by both sides of the Civil War in order to raise wartime funds, and in 1862 the Office of the Commissioner of Internal Revenue was created to collect wartime income tax funds. The first peacetime income tax was imposed in 1894, a 2-percent tax on earnings above $4000, which at that time only affected the very richest 2-percent of Americans. Income taxes became a permanent feature of American life in 1913, with ratification of the 16th Amendment. Taxes were expanded during World War I with revenue acts which created federal estate taxes as well as greater taxes on earnings by individuals and businesses.

The rise in taxes in American life has led to increasing searches for loopholes and other means of escape. In the 1960's, the tax-free Cayman Islands began to be used as a haven from the IRS. In 1996, the flight of wealthy Americans abroad caused Congress to pass a law prohibiting reentry to the U.S. for former American citizens who abandoned their U.S. citizenship to avoid paying taxes.

----------------------------------------

As mentioned above, the first Peace time Tax was imosed upon us in 1894. I have to side with Raven on this, as If it where up to me, I'd give great consideration to repealing the 16th amendment.

BTW, Let's please keep this civil, as I will allow a conversation to continue here, But If it starts to get crass, It will be moved to H&S.

Stephen


If the UK government carries on, they'll be having another tea party soon.
The UK is insane for Tax.. their even thinking about taxing people for parking their own car on their private property!! This is for environmental reasons, and goes up in a scale relating to the engine size!!

I'm a student, and have to commute, if this government carries on, i'll be taxed out of my studies, and even if I get through, i'll have to work within a 6 mile radius of home because I'll have to use public transport, which is so bad in the UK, you can't rely on it. I had a train the other week, a 12 mile trip... it had to stop for two hours for safety checks.

Apparently socialisms high tax has improved public transport, health, policing, etc..... yet everything in the UK is either getting out of control or broken. We'd change governments, except the voting system is messed up.

If any of you guys across the pond like the idea of socialism... come and live and work in the UK for a bit. You'll soon change your mind.

back on topic....... taxing people for what they earn in a game is stupid beyond belief. I have a pretty penny saved up in Guildwars...I wouldn't want to be taxed on it. So for every sword of flaming fury +1 I have they take a shield of Brilliant defense..... ;D
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