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Taxing and Regulating Virtual Worlds
Pajamas Media ^ | November 15 | Andie Brownlow

Posted on 11/15/2009 9:15:41 AM PST by AJKauf

MMORPGs (massively multiplayer online role-playing games) are internet adventure games with no real end. The point of most of these games is to quest for experience to gain skill levels and explore vast virtual worlds filled with monsters and other players.

In some of the more popular MMORPGs, like World of Warcraft, you can learn profitable in-game trade skills, gather valuable resources from the land, and participate in functioning economies with in-game auction houses. However, even in a virtual world of magic and mythical races, you aren’t safe from the long arm of government.

Over the past 15 years or so, virtual property and income in online games have attracted the eye of governments for taxation. When virtual money and items become traded with real money, then monetary value is assessed to those items. There is currently a black market for in-game currency and items, traded online for real money.

Governments are looking at ways to justify taxing virtual items because they now have real-world value, even if they exist only on a server somewhere. With this inevitable tax comes intrusive and overbearing regulation. More bureaucracy and less freedom; that’s always a good thing, right?....

(Excerpt) Read more at pajamasmedia.com ...


TOPICS: Politics/Elections
KEYWORDS: mmorpg
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1 posted on 11/15/2009 9:15:42 AM PST by AJKauf
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To: AJKauf

Taxing property in a video game is beyond ridiculous.


2 posted on 11/15/2009 9:16:56 AM PST by mysterio
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To: AJKauf

I believe the logic here...would be to issue imaginary tax bills, for imaginary characters, and pay with imaginary money.

I am reminded of my co-worker...who was daily checking on the charge-card bill at work. One day, she logged on and found a $25 bill sitting with the title “warrior sword”. Naturally, she picked up the phone and called her husband (an Air Force fireman). There was a long pause after she asked about this charge.

He eventually admitted that he bought an imaginary sword. She asked...so was it worth it...and then hung up.

Maybe the government can make everyone a tax like this is for a service...but I can just see a judge standing there with the IRS guys...and asking...so, this is an imaginary character that you are trying to collect taxes from? I don’t see these judges really buying into this logic too well.


3 posted on 11/15/2009 9:22:20 AM PST by pepsionice
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To: AJKauf

If got an idea that fits, just Monopoly money to pay the taxes.


4 posted on 11/15/2009 9:24:48 AM PST by rscientist (Yea, I am a rocket scientist. My wife says that she is still not impressed.)
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To: AJKauf

A tax on virtual property should be paid with virtual money.

Is the US dollar virtual money?


5 posted on 11/15/2009 9:27:24 AM PST by ThomasThomas (Sometimes I like nuts. Thats why I am here.)
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To: pepsionice

“I don’t see these judges really buying into this logic too well.”

Slept throught the KELO decision did you?

You can bet they will try and pass it and collect it...and some idiot judge will be happy to enforce it...


6 posted on 11/15/2009 9:29:32 AM PST by Crim
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To: bamahead; ShadowAce; Slings and Arrows

I just don’t know what to say...

I can see it now on my tax returns. Capital gains taxes for: “Sold 10,000 Gold in WoW for $500”. Maybe we’ll eventually get tax breaks for profits from selling Iron Bars to offset the taxes for selling other in game items. lol

This is beyond ridiculous.....


7 posted on 11/15/2009 9:41:36 AM PST by KoRn (Department of Homeland Security, Certified - "Right Wing Extremist")
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To: KoRn

What do they do when virtual world items have increasingly negative values?

10,000 WoW gold 3-4 years ago was like $1,000.

10,000 WoW gold just a few months ago was worth like $150 to $200.

Items once impossible to obtain without the help of 40 players can now be obtained with 5-7 and they have no longer have any in game value beyond collector status.

Every time a game expansion is released ever item that existed in the previous version is worth nothing. Every time an expansion is released the real world value of in game gold practically gets cut in half.


8 posted on 11/15/2009 10:06:03 AM PST by PittsburghAfterDark
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To: PittsburghAfterDark

I just checked a gold buying site for Warcraft.

The price of 1,000 gold when I quit playing was about $20. It’s now $7.24.

That’s how much the value has depreciated in just 7-8 months.


9 posted on 11/15/2009 10:10:13 AM PST by PittsburghAfterDark
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To: ThomasThomas

it will be soon..


10 posted on 11/15/2009 10:25:18 AM PST by Schwaeky (The Republic--Shall be reorganized into the first American EMPIRE, for a safe and secure Society!)
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To: KoRn
Facepalm
11 posted on 11/15/2009 10:34:45 AM PST by Slings and Arrows ("When France chides you for appeasement, you know you're scraping bottom." --Charles Krauthammer)
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To: PittsburghAfterDark

I don’t play any of these games, but one of the most interesting ones to me (economics-wise) is Second Life, where instead of selling you “Linden dollars” directly they try to match up buy and sell orders, like a real currency exchange.

https://www.xstreetsl.com/modules.php?name=Currency&file=orderlist

I remember reading articles that there were anecdotal reports and official concern that these kind of virtual currencies could be used for money laundering (using fraudulent credit cards, I suppose; the Second Life company tracks your CC info, I think).


12 posted on 11/15/2009 10:51:13 AM PST by fours
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To: mysterio

They need the money and there’s nothing else left to tax.

LOL. I love it. This is the beginning of the end. The collapse is imminent.


13 posted on 11/15/2009 11:03:13 AM PST by mamelukesabre (Si Vis Pacem Para Bellum (If you want peace prepare for war))
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To: AJKauf

If I am on my Mage in World of Warcraft and I see any politicians or government agents (probably all playing Undead Rogues) then I am gonna be slinging frostbolts at them, and I don’t care what Homeland Security or the Secret Service says ...


14 posted on 11/15/2009 11:03:17 AM PST by spodefly (This is my tag line. There are many like it, but this one is mine.)
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To: spodefly

Never played that. I’ve played a little oblivion though.

I’d hide behind something at their “6” and from a safe distance, conjure up something nasty, then use an invisibility spell on myself. While they’re busy with your creature you conjured, sneak behind them and stab them in the back with a magic paralysis sword. They’ll never know you were there.


15 posted on 11/15/2009 11:36:10 AM PST by mamelukesabre (Si Vis Pacem Para Bellum (If you want peace prepare for war))
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To: rdb3; Calvinist_Dark_Lord; GodGunsandGuts; CyberCowboy777; Salo; Bobsat; JosephW; ...

16 posted on 11/16/2009 6:17:26 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: AJKauf
Let the taxes be paid in WoW gold or whatever it is they use.

Still, InFreakingCredible.

Morons run our nation.

17 posted on 11/16/2009 6:50:12 AM PST by Tribune7 (God bless Carrie Prejean)
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To: pepsionice
I believe the logic here...would be to issue imaginary tax bills, for imaginary characters, and pay with imaginary money.

And if the characters get pissed off enough about the plunder of the fruits of their labors, they can have a virtual tax revolt and string up the virtual tax-sucking regulators. Or virtual tar and feathers.

18 posted on 11/16/2009 7:37:30 AM PST by Still Thinking (Quis custodiet ipsos custodes?)
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To: ThomasThomas

This is more of a tax on the real-world transactions of paying real money for virtual gold in-game. I used to play World of Warcraft, and I forked over $40 for 500 gold or so. There was no tax on the transaction, and I think that’s what they’re trying to regulate.

For my money, I would love to see them try to tax the economy in EVE Online. EVE Online has the largest open market economy IN THE WORLD (real or virtual), and trying to tax the game (they’re based in Iceland) would be a fool’s gambit.


19 posted on 11/16/2009 8:24:37 AM PST by rarestia (Confutatis maledictis, voca me cum benedictis)
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To: ShadowAce

Thanks for the ping.


20 posted on 11/16/2009 8:42:53 AM PST by GOPJ (ObamaCare - slush fund scam that would make Bernie Madoff blush.)
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