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April 9, 2007
Tax Treatment of Players in Second Life and World of Warcraft
Leandra Lederman (Indiana) blogs on Conglomerate about the tax consequences to players in Second Life and World of Warcraft, from her recent article, Taxing Virtual Worlds:
How should transactions within Second Life be taxed? My view is that, from a policy perspective, the right result is to tax commercial activity within virtual worlds but not game play. Thus, if Anna is a Second Life entrepreneur raking in the Lindens and Bert uses Second Life to build and furnish a virtual castle to hang out in with his friends, then, as a general matter, Anna should be taxed on her Second Life activities, but Bert shouldn’t be. The problem is how to reach that result.
Games like WoW raise income tax issues, in part because items in them, though part of a "game," have real market value. In [my] paper, ... I discuss two of the issues: the taxation of loot "drops" and the taxation of exchanges within the game, such as the exchange of a virtual sword for gold. From a policy perspective, my view is that drops and purely in-game trades should not bear income tax. One of the problems with taxing them would be the regressive nature of the tax because players who put in the most time and the least money would owe the most tax, although players who put in the most time (40-80 hours a week or more) tend not to be employed full-time (e.g., students). Players with higher incomes tend to be those putting in less time; they tend to spend money in the "real market" in lieu of hours of "grinding" to level up. Such a tax would also pose administrability issues because of its enforcement difficulties. For these reasons and others, I argue that players of games like WoW should be taxed if and when they cash out—that is, on real market trades. That approach would allow those playing for entertainment not be taxed on their game play (beyond the tax they already paid on the money spent on the game), while catching most profit-seeking activity.
April 9, 2007 in Scholarship | Permalink
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Comments
According to Blizzard's EULA, I do not own my character or any of my character's items. As such, how can you possibly justify my paying taxes on something I don't own?
Posted by: Diomedes | Apr 9, 2007 11:16:32 AM
You DO realize to 99.9% of the people, that this is a game and that these "drops" have no monetary value? I think you have little knowledge of the actual game and you should realize that the "selling" of such things for REAL money is against Blizzard's policy and the majority of people do not have a problem with this and abide by it. A virtual sword has ABSOLUTELY NO MONETARY VALUE in the game! I guess you'd better make online scrabble your next target since I am sure each letter could potentially have a monetary value if people were to gamble on it! You could technically attach a monetary value to me taking a nap if you wanted it but trying to collect on that 'tax' would be ridiculous, much like your idea of taxing virtual worlds.
Posted by: John Fahlman | Apr 9, 2007 11:17:16 AM
The only problem with WoW is....sale of in game commodities violates the EULA. Do you suggest we start taxing all the weed and cocaine that gets trafficked through America? It's a nice dream for the IRS.
Posted by: NealTse | Apr 9, 2007 11:28:29 AM
As a Wow player, and as someone who also played Everquest heavily, I think things like this are absolutely ludicrous. Nevermind that we're already taxed into poverty, now let's start taxing our virtual entertainment.
Apparently the tax I paid on the money I made at my job, then the tax I paid on the car that drove me to the store, the taxes I pay that (laff) "built" the road I drove on, the sales tax I paid on the game itself, the tax I paid on the fuel for my car, the tax that i pay on the electricity in my house, the tax I pay on my house, the tax I paid on my computer which I play the game on, then of course the tax for the internet connection also required to play the game, but now my play time gets taxed too?
WHen will it end? I know, how about a breathing tax. Gotta fund the planting of all those new trees somehow right? Gotta keep air to breathe!
Posted by: PixieDust | Apr 9, 2007 11:36:13 AM
The biggest problem I see with this is that it would be interstate commerce.
Many of these deals are brokered over the internet so it would be difficult to tax, if even legal.
Many are also brokered over online acutions like eBay, or over personal sites set up by oversees companies.
My final point is that according to the TOS of WoW trading Items outside the game is a bannable offense. By taxing these activities the violators would gain some level of legitimacy. As an MMO player (not WoW, but others)I would hate to see these people gain any suggestion that what they do is a real job.
p.s. Just because something can be taxed doesn't mean it should be.
Posted by: iceph03nix | Apr 9, 2007 11:50:21 AM
So in the WOW case, if I sell one item in the real world I need to claim that as income. Can I then claim all the money I have spent on the WOW game, subscription costs, and other offline purchases as items as business expenses? Can I now claim home office expenses? Cable modem fees?
Posted by: bill | Apr 9, 2007 11:53:56 AM
Taxing players "in game" after they have already been taxed to purchase the game, and on top of paying for the game monthly is rediculous. Dispite the "real world value" of in game gold an items, most of the items and gold that are purchased are done so out of the country. So good luck enforcing the Chinese Gold Farmers to pay US taxes.
Taxing players to PLAY the game is hands down absurd.
Posted by: Neiro | Apr 9, 2007 11:57:25 AM
How would this work with minors though? Could I simply register my account in my daughters name and become tax exempt?
Posted by: Martin Wallace | Apr 9, 2007 11:59:10 AM
You can in NO way tax the real world sale of World of Warcraft items. It is explicitly forbidden in the End User License Agreement to sell items in the game for real money outside of the game. You could tax the subscription to play the game. The standard month-to-month subscription is $14.99 so taxing 1% of that times 8 million subscribers would net nearly 1.2 Million per month. Kinda poetic to pay for the War in Iraq with a game called Warcraft.
Posted by: Sparky | Apr 9, 2007 12:02:07 PM
Mam?
With all due respect? You're out of your bloody skull if you think this is even a potential way of making money for our already corrupt government. What's next? Every time I log on to the internet, send an email, I have to pay the morons at the post office (already the worst delivery service in the world) .25 cents? You'll do well in Washington though.. with that kind of logic.
Posted by: MasterChief | Apr 9, 2007 12:03:31 PM
Exchanges of virtual items exchanged on internet networks should only be taxed by those that control the internet protocol and physical channels of communication, and of course by the controllers of those virtual items. Since the protocol (usually HTTP) is free, the only remaining possible taxing entity should be the internet providers, and if the internet could be free (as in beer, possibly via mesh networks), then there can be no tax!
I would appreciated it if you kept your favorite online fantasy games and the black force of taxation seperate, such that those less endowed in the membrane not get the wrong idea. Otherwise, you should be wise to disclaim that you don't know jack about the internet and what it is.
- Jae
Posted by: JackGardener | Apr 9, 2007 12:09:05 PM
Exchanges of virtual items exchanged on internet networks should only be taxed by those that control the internet protocol and physical channels of communication, and of course by the controllers of those virtual items. Since the protocol (usually HTTP) is free, the only remaining possible taxing entity should be the internet providers, and if the internet could be free (as in beer, possibly via mesh networks), then there can be no tax!
I would appreciated it if you kept your favorite online fantasy games and the black force of taxation seperate, such that those less endowed in the membrane not get the wrong idea. Otherwise, you should be wise to disclaim that you don't know jack about the internet and what it is.
- Jack
Posted by: JackGardener | Apr 9, 2007 12:09:56 PM
>>You DO realize to 99.9% of the people, that this is a game and that these "drops" have no monetary value?
This statement is very ignorant. Nothing has a different monetary value to someone else. If a BOE purple drops in a heroic instance that is valued at 500g, that drop has a real-world value of whatever the current market price is for 500g (right now it's probably about $50) Whether the player that picks up the drop recognizes this real-market value is irrelevant, that BOE still holds a market value because it can be exchanged (Until it becomes equipped, at which point it loses most of its value because the only way of exchanging it is to exchange the character)
Posted by: Ken Sykora | Apr 9, 2007 12:12:05 PM
Exchanges of virtual items exchanged on internet networks should only be taxed by those that control the internet protocol and physical channels of communication, and of course by the controllers of those virtual items. Since the protocol (usually HTTP) is free, the only remaining possible taxing entity should be the internet providers, and if the internet could be free (as in beer, possibly via mesh networks), then there can be no tax!
I would appreciated it if you kept your favorite online fantasy games and the black force of taxation seperate, such that those less endowed in the membrane not get the wrong idea. Otherwise, you should be wise to disclaim that you don't know jack about the internet and what it is.
- Jack
Posted by: JackGardener | Apr 9, 2007 12:12:07 PM
I'm not paying the American government tax unless I get something in return. You Americans had a Tea Party in Boston to demonstrate your disregard for Taxation without Representation. What right would the American government have to tax me for Virtual transactions conducted on foreign soil?
CIA abductions and torture in secret prisons are about all that the American government offers me. I'm not paying you guys tax to fund your invasions and assassinations.
If you tax Virtual Characters for making Virtual Money then why can't they pay in Virtual Currency? You're essentially taxing foreign nationals when you tax a Virtual Economy. American Law is not valid within a Virtual Community, only in the real community that the machinery is housed.
Of course you'll want to change that so that Virtual Space becomes American Space. I'd hazard that even if Second Life were housed on Sealand the American government would still seek to tax all of the members based on the rather tenuous argument that "we have more guns than you" which has worked so well in your invasion of Iraq. How will America assert it's dominance over Virtual Space? Through control over the Internet - your department of "defense" is making some very suspicious noises regarding public key encryption.
America is often accused of seeking hegemony. I wouldn't be surprising if you started to accuse Second Life of harbouring WMD. At least you have incontrovertible evidence that WoW routinely slaughters armies of people - not even Dubya could blame an intelligence flaw for invading that particular Virtual Community.
I can just see Dubya arguing that a big red dragon tried to kill his daddy which is why American soldiers must travel to it's the secret cave under the hill and die in the thousands.
Posted by: Andy | Apr 9, 2007 12:13:15 PM
Considering that all items in WoW and similar games are owned by the company and we the players are merely using those items within the game we are playing I'm curious as to how they can be taxable at all? I do not play WoW but I do play a similar game, Guild Wars. Everything I find within the game is owned by the company and I derive no material benefits from them whether I trade or sell them for in game money. Now...if I "sell my time" as many people do when they sell items on eBay then I agree that money is income and should be taxed, but then again we're talking transfer of actual federal currency.
In your article you mention the difficulty of figuring taxation within the game, I argue instead that its impossible based on the ownership of the material. I test software for a living and know that even though you purchase the software the real ownership of the code resides with the company that created it. And given the current events where companies are pressuring eBay to not allow auctions for virtual merchandise there seems to be nothing to tax.
Please note I have carefully steered clear of talking about Second Life...since there is a real world correlation (as defined by the software company) between in-world money and federal currency I would not argue it is non-taxable...for that reason alone I am closing my Second Life account. I do not want to be taxed on perceived income from that game.
It's an interesting intellectual discussion but nothing more. Taxing "gold" in an online game is functionally the equivalent of taxing the money in a Monopoly game, in each case I own neither "currency" and I derive no material gain from having it.
Finally I leave with this thought...Taxing the fake money in a computer game only leaves the players with one choice, stop playing the game. If no one plays the game then there is no income, the company makes no sales on software which leads to the eventual closing of the company. What taxes can you collect then?
Posted by: Scott | Apr 9, 2007 12:13:41 PM
But then the question would be, who would tax it, and should we also get a tax deduction then on the business expense of our network connection, the computer we use to connect to the game, and the fees to use the game?
If so, I could see my deductions far outweighing any taxable income from anyone who choses to play the game. In my case, I know I have spent more than $140 on computer upgrades for WoW in the last 6 months. I have spent $40 + 6 x $14.99 to cover the game itself. I spent 6 * $5 so I don't have to deal with Windows while playing WoW. So that is about $420 this year without buying more upgrades.
So even at my high lvl of taxation, it is going to take about $1500 of real sales to get to a break even with my gaming deductions. If someone is selling enough to make $1500, they are likely doing this as their sole means of employment. At that time, they should be easy to track down.
As something that has no real location, who gets to tax it? I know from legal precident that NY would like a bite of the income tax if anything ever happened in their state. I am sure some other states would like to then get their hands on a similar slice. Then you have the problem of, do you tax based on the location of the servers that host the virtual items, or the location of the person who "earned" the item, or the location of the person who bought the item? If you go there, then the states might want IP addresses of the transactions to know who gets a chance at the money. This is especially true when you have mobile users.
Or where you thinking of sales tax? If so, we get into who collects it, the seller or the purchaser? Are you going to try and track internet sales to users in other states, or even in other countries?
I hope this doesn't give the wrong impression, I don't thik it is a bad idea to tax real money transactions. I do think taxing anything virtually is going to ask for problems. I also think you might be looking at such small revenue as to make it not all that interesting. Then again, I don't know what the Second life market space is like.
Posted by: Steven | Apr 9, 2007 12:14:02 PM
I'm not paying the American government tax unless I get something in return. You Americans had a Tea Party in Boston to demonstrate your disregard for Taxation without Representation. What right would the American government have to tax me for Virtual transactions conducted on foreign soil?
CIA abductions and torture in secret prisons are about all that the American government offers me. I'm not paying you guys tax to fund your invasions and assassinations.
If you tax Virtual Characters for making Virtual Money then why can't they pay in Virtual Currency? You're essentially taxing foreign nationals when you tax a Virtual Economy. American Law is not valid within a Virtual Community, only in the real community that the machinery is housed.
Of course you'll want to change that so that Virtual Space becomes American Space. I'd hazard that even if Second Life were housed on Sealand the American government would still seek to tax all of the members based on the rather tenuous argument that "we have more guns than you" which has worked so well in your invasion of Iraq. How will America assert it's dominance over Virtual Space? Through control over the Internet - your department of "defense" is making some very suspicious noises regarding public key encryption.
America is often accused of seeking hegemony. I wouldn't be surprising if you started to accuse Second Life of harbouring WMD. At least you have incontrovertible evidence that WoW routinely slaughters armies of people - not even Dubya could blame an intelligence flaw for invading that particular Virtual Community.
I can just see Dubya arguing that a big red dragon tried to kill his daddy which is why American soldiers must travel to it's the secret cave under the hill and die in the thousands.
Posted by: AndyB | Apr 9, 2007 12:14:27 PM
Thats is possibly the stupidest article/blog i have ever encountered in my life. It displays your staggering ignorance.
Posted by: Nick | Apr 9, 2007 12:16:40 PM
You dumb cow. It's a game, leave it at that, why dont you go tax people playing hungry hungry hippo... im sure you would relate.
Posted by: neno | Apr 9, 2007 12:17:25 PM
You dumb cow. It's a game, leave it at that, why dont you go tax people playing hungry hungry hippo... im sure you would relate.
Posted by: neno | Apr 9, 2007 12:18:21 PM
Exchanges of virtual items exchanged on internet networks should only be taxed by those that control the internet protocol and physical channels of communication, and of course by the controllers of those virtual items. Since the protocol (usually HTTP) is free, the only remaining possible taxing entity should be the internet providers, and if the internet could be free (as in beer, possibly via mesh networks), then there can be no tax!
I would appreciated it if you kept your favorite online fantasy games and the black force of taxation seperate, such that those less endowed in the membrane not get the wrong idea. Otherwise, you should be wise to disclaim that you don't know jack about the internet and what it is.
- Jack
Posted by: JackGardener | Apr 9, 2007 12:18:35 PM
Did you lawyers ever here of the medical saying, first do no harm. If you are going to find new and innovative ways for our government to pull more undeserved dollars from our pockets then dont be surprised if you are deservedly hanged by the neck until dead when the revolution comes and anarchy reigns on the streets of north america. Sound unbelievable, you better hope so because when there are no police the laws that make life more difficult or expensive will lead only to their creators destruction. When anarchy reigns lawyers and judges hang.
Frezno :D
Posted by: FreznoBob | Apr 9, 2007 12:19:27 PM
I cannot believe that the government would try to tax something like a video game. Honestly, how desperate do you have to be to try to tax thousands of screeching ten-year olds? The idea of taxing a virtual economy is in my opinion, the worst idea ever. Many players aren't even in the US to boot. And why would I pay such a tax when I get nothing in return for it? The govt. doesn't pay for my online fees, they don't help me in any way pertaining to this game.
Even so, taxing a virtual "item" doesn't make sense. You know what that Item is? A variable that SAYS you have that "item". Its not really anything. So you are really taxing data. How can you tax data? should they start taxing businesses based on how many documents they have?
Posted by: Ian Gamble | Apr 9, 2007 12:25:47 PM
The day gameplay is taxes, is the day I stop playing. A whole industry will die. This idea is preposterous.
Posted by: Jeff | Apr 9, 2007 12:27:30 PM
Quote: Do you suggest we start taxing all the weed and cocaine that gets trafficked through America? It's a nice dream for the IRS.
They already do. Money gained illegally is taxable. If you rob a jewelery store, and forget to declare that as income, the IRS can get you on tax evasion charges regardless of whether you were ever prosecuted for the crime. Same thing for the drug trade. If you import heroin and sell it, and don't report the income to the IRS, you are now guilty of tax evasion.
The most famous example of this is Al Capone, who made the lion's share of his money manufacturing, importing, and selling illegal drugs. In his case, it happened to be liquor during Prohibition, but.
While they never managed to prove he was a bootlegger, rum-runner, and racketeer in court, they did manage to prove twenty odd counts of evading income taxes on his liquor sales and put him behind bars for a decade.
Posted by: Jim | Apr 9, 2007 12:30:55 PM
How bored are you lady? Do you have a first life? Do you even play any of these games you want to tax people on? I payed tax when I purchased the game. Blizzard pays corporate taxes to be in business to run the game. If you want more from us than that you can kiss my ass.
Posted by: Charlie Harper | Apr 9, 2007 12:43:04 PM
I would pay tax on virtual income using my virtual earnings, but my virtual wife ran off with my virtual accountant, leaving me virtually bankrupt.
Ah well at least my cyberdog, Prof. Scott, stuck with me through all this. Good puppy.
Posted by: Taxmebaby | Apr 9, 2007 12:43:39 PM
Seems typepad is broken. My comments are Attributed to a Scott, and I am assuming his are under my name.
Posted by: Steven | Apr 9, 2007 12:45:59 PM
I find it difficult to believe that anyone would be "mentally-lacking" enough to actually believe taxation in the virtual world of online gaming is feasible. Thus, I'm left to conclude that the author of this article simply took a popular part of our current culture (MMO's) and a hot topic (taxes) and combined them with the simple intention of getting read, nothing more.
Kudos to you, ma'am, for attracting so much attention to your writing today (as evidenced by the plethora of comments left here). Perhaps you could strive to build on this new-found celebrity with some useful content tomorrow?
Posted by: Cuppojoe | Apr 9, 2007 12:47:39 PM
My IQ just dropped 10 points by reading your blog. Thanks a lot!
Posted by: NA | Apr 9, 2007 12:48:26 PM
I worship the WoW developers as living gods. As such, I am merely participating in a religious activity and it is hence not taxable. At least *I* only virtually kill people in the name of my religion.
Oh, and I'd like to see the IRS come after my warlock. I got that instant howl-of-terror for a reason! I pity the fool.
Sideburnz casts Deathcoil.
AgentSmith is afflicted with Deathcoil.
AgentSmith dies.
Sideburnz casts campfire.
Sideburnz chuckles.
Oh, and if you really want to tax an economy that's based on a faucet/sink economy, just start metering the sinks. Not sure what on earth Uncle Sam could possibly want with virtual currency though...
Posted by: Joseph Schafer | Apr 9, 2007 12:50:21 PM
WOW... Ok, taxing game items or gold only when you actually SELL it on eBay (for real money) is even kinda stupid but if you DARE try to tax the items/gold as we earn them in the game, that would be INSANE!! There are 10 year olds playing UO or WoW. You aren't actually considering TAXING them for playing a game, are you?? If an 11 year-old girl kills a monster and gets an artifact worth 10,000,000 gold (which, let's just say is worth $30), you aren't actually going to charge her $2.00 in tax, are you???
Well, I definately wouldn't pay tax on a virtual world...not even if I sell stuff on eBay. You can try though.
ha ha, I can just see it now...
OGRE LORD KILLED
You find 1000 gold pieces (100 for IRS, 900 for you)!
Posted by: Paul | Apr 9, 2007 12:50:55 PM
How bored are you lady? Do you have a first life? Do you even play any of these games you want to tax people on? I payed tax when I purchased the game. Blizzard pays corporate taxes to be in business to run the game. If you want more from us than that you can kiss my ass.
Posted by: Charlie Harper | Apr 9, 2007 12:50:56 PM
Any sales of items are purely black market.
Posted by: Paul Rhye | Apr 9, 2007 12:52:05 PM
Tax on cashout seems reasonable to me. I don't understand why you people are so bent up about it. If you play for 6 months, and sell your toon for $300, then 6*$15/mo = $90, so tax on $210. That's how *everything* works. If you use WoW as an investment to make money, then you can be taxed on it. Just like stocks. Just like collectibles. This is regardless of Blizzards EULA. The EULA is irrelevent here. And to a poster way up top, actually some states DO have tax laws for illegal drugs. Mainly so when you get arrested for smuggling, they also can fine you taxes owed. Some people consider this a double-whammy, but it still happens. As long as your taxed on cash-out, and not on drops or in game trades, it works for me. (I have played WoW for about 8 months now, btw, so I'm not biased against it, I'm just a realist)
Posted by: Tim | Apr 9, 2007 12:56:05 PM
Unreal...
Leave it to the government to find yet another retarded reason to tax its citizens.
I feel it's appropriate to reply in netspeak to this idiotic trend of thought.
U R fUk1nG sT00p1d omgwtflolbbq!!!!!1111oneoneone
Learn2think n00b!
Posted by: youarefuckingretarded | Apr 9, 2007 12:57:17 PM
What seems to be missing from all of this lively debate, and also completely lost on the author is the following:
Transactions that touch real-world value are *already* taxed. It's no different than if I sell something to my neighbor. Would it be taxed? Probably not, but from strictly legal perspective, yes it should be. The same issue exists when you by items through mail order from out of state. Your *supposed* to report that tax, but that vast majority of people don't.
This has absolutely nothing to do with online-gaming anymore than taxing the trading of baseball cards has to do with baseball.
If I'm doing business with an out of country seller, sorry, but the US gov't really has no grounds for any claim to the money.
However, if I'm SELLING goods and producing *income* they already have a mechanism for collecting that.
No new laws are needed here, period.
Posted by: pixelpusher220 | Apr 9, 2007 12:59:39 PM
I play WoW not for personal game, but for entertainment as do 99% of the people I know. The remaining 1% that play to try and earn money are heavily despised and typically are off shore farmers trying to earn real money off of virtual money. Good luck hunting them down and getting taxes from them.
While we're at it, can I please have some of the cheap drugs that are being passed around?!
Posted by: Reid | Apr 9, 2007 1:01:53 PM
Did half of you morons even bother reading this?
Several of you proceed to whine and complain about this and that. She did not say to make you pay a tax to PLAY the game. The tax is solely for when you make a trade for REAL, offline, money.
Those of you who say that selling items for money violates the EULA and that you don't partake, then fine. You are SAFE, no taxes for you.
WoW does not operate on HTTP. Readup before trying to sound smart.
Anyway, quit being whiny fags about having to pay taxes, unless you do not value your freedom and want to live in China.
Posted by: Anonymous | Apr 9, 2007 1:02:08 PM
I play WoW not for personal gain, but for entertainment as do 99% of the people I know. The remaining 1% that play to try and earn money are heavily despised and typically are off shore farmers trying to earn real money off of virtual money. Good luck hunting them down and getting taxes from them.
While we're at it, can I please have some of the cheap drugs that are being passed around?!
Posted by: Reid | Apr 9, 2007 1:03:18 PM
Never mind the EULA and TOS. Never mind even the legality of this. There is a higher issue at stake here. The government should not be trying to find ways to raise new taxes. Instead, they should should be focusing their energy on becoming more efficient with what they already take from us. Corporations have to be efficient in order to keep their edge but the government does not. It's high time that the government is told NO, if you need more cash, be smarter with what you have rather then stealing more from the people.
Posted by: SG | Apr 9, 2007 1:04:07 PM
I am dumber from having read this article. This woman should choke on a pretzel.
Posted by: what | Apr 9, 2007 1:04:50 PM
This is totally ridiculous. Hey Leandra, why don't you start taxing critical thinking skills? You can have a new stream of revenue for government waste without eating into your own pocketbook.
Posted by: Jason Camp | Apr 9, 2007 1:16:04 PM
>>This statement is very ignorant. Nothing has a different monetary value to someone else. If a BOE purple drops in a heroic instance that is valued at 500g, that drop has a real-world value of whatever the current market price is for 500g (right now it's probably about $50) Whether the player that picks up the drop recognizes this real-market value is irrelevant, that BOE still holds a market value because it can be exchanged (Until it becomes equipped, at which point it loses most of its value because the only way of exchanging it is to exchange the character)
---------
Actually that statement is very ignorant. You're playing into exactly what the author is talking about. You're giving a completely virtual item a *real world* value and blurring the line. Not only that but, as has been stated here, by stating a real world value for a virtual item you're going outside Blizzard's EULA. Therefore your argument is null, void, and your account would be banned upon being caught. Keep your real life your real life. Keep your virtual one the same.
It would be one thing if this kind of activity were promoted, or at least allowed. But it's not in WoW and the *GAME* should be left alone. That's where it and this train wreck of a taxation idea stops. If people do it, it's their own fault for having their account banned. If people buy drugs, or liquor when they're underage, or do ANYTHING illegal, it's still technically possible for them to do it right or wrong, but do they get taxed for it? Of course not and in fact they might get jailed for it (i.e. "caught"). I should tax you for wasting the last 2 minutes of my life for rebuking your bong-smoked hazy statement.
Posted by: Lum | Apr 9, 2007 1:18:05 PM
I agree with SG.
Also - just because money is being made somewhere does not entitle the government to it, btw.
Posted by: id | Apr 9, 2007 1:25:40 PM
The real world value of any in-game item is non-existent. It's the relative value of time verse capabilities of acquiring those items, which differ greatly from 1 person to the next. In-game currency is not backed by any tangible items (like gold) and is not controlled by the government. Therefore, there is nothing preventing those with the proper access from creating in-game currency for themselves, besides corporate interests (the PR kind).
If those hurdles were even attempted to be over-come, you now have to apply more real-life laws to fantasy worlds. For example, stealing items from players, or worse yet, killing players. Each of those scenarios can potentially deal with real-life financial loses of an unintended nature. How could you possibly think to apply real-life laws to in-game mechanics, especially when mechanics of that nature are not only supported, but even emphasized.
My advice is to do some real research, and include games such as Eve-Online and Guild Wars into your curriculum. Past games such as Everquest would also do you some good into understanding just how diverse fantasy realms and interactions with intangibles can be.
Basically, you're trying to tax a thought process in which a minority have figured out how to exploit for financial gain. Sounds quite ignorant, doesn't it?
Posted by: Jeff | Apr 9, 2007 1:29:32 PM
I would suggest that this person try using some of that thought power for some more worthy effort. However, I believe that particular effort would suffer from the same sort of mental masturbatory decline as this line of thought.
I agree with "what" above. The person who wrote this was an idiot of the lowest order.
Posted by: Random | Apr 9, 2007 1:36:46 PM
I actually kind of like this idea. They'll have to make our computer purchases as deductibles. If they do this, I think I'm going to have to sell like $20 worth of real-money items. Then I can deduct the $15*12 months, my cable bill, my electric bill, and of course any comp upgrades. So I pay $2 in taxes and get $180(WoW subscription for a year) + $540 (Cable costs for a year) + ~$2k (getting a new comp this year) for a total of $2720 in deductions (plus whatever my electric bill totals for a year). Now THAT'S a great deal. rotfl
Posted by: Scott | Apr 9, 2007 1:39:57 PM
If we accept the premise behind social contract, and the notion that people form Governments and give up certain personal liberties in the form of paying Taxes and obeying laws dictated by the tyranny of the majority, then typically the government provides representation and services such as schools,roads, defense, Police, laws, regulates commerce etc etc. Now, if we choose to ignore that Blizzards EULA says in game persona's are owned by Blizzard INC., as are the characters incomes/properties. I am then left with asking what services the U.S. government is going to provide within the game environment to justify taxes and levies against a "virtual world". Will the United States Government create a standing in game military and if so, which faction will they chose to protect.. Horde or Alliance? Would they build schools? Maintain public transport? Regulate commerce? Otherwise, your proposed taxation would just be yet another form of taxation without representation?
Booty Bay TEA PARTY 2007!
Posted by: Christian | Apr 9, 2007 1:40:07 PM
