Postby Guest » Wed Jan 31, 2007 12:41 am
Second topic of discussion:
Can the 'virtual' world of MMORPG's (in this example, WoW), be considered a legitimate environment for taxable income? If you trade someone "real" money for a pair of Boots of Asskicking, has a taxable event occured? I would posit that it has not - because, while their is an implicit, quasi-market to determine 'value' for this, the whole of the property is still owned by the manufacture of the game in question (in this instance, Blizzard software). Nothing has been "created" - the item was materialized ex nihilo by software - and therefore, the "owner" (again, Blizzard) has lost nothing as well as gained nothing. There is no gross output or gross input. It would be like taxing someone every time they put a quarter into an arcade game.
And this is to say nothing of the invalidity of the very environment for a legitimate, taxable market. If Blizzard suddenly decides that Boots of Asskicking should no longer be +20 Asskicking, and instead are now +10, hasn't the quasi-owner (not the "real" owner, since that's still Blizzard, as demonstrated by their ability to change the items value at will) lost taxable value, if the item was taxable in the first place? This is also nicely demonstrated by the recent release of the Burning Crusade expansion for Warcraft - overnight, values of certain items vanished - some items became worthless, others priceless. Inflation doubled. And yet, the IRS wants to tax it all. Even though government alread receives monetary benefit every time someone buys the game (from both Blizzard, from their profits, and from the customer, from the game sale), as well as every expansion, and every piece of computer equipment the invidual (not to mention the company) needs to buy/maintain. And yet, they want to tax this chaotic, online world. This of course will probably cost millions of dollars to investigate and set up anyways, eliminating any expected monetary gain.
But, did you expect efficiency and logic from the IRS?