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Will Virtual Worlds be Taxed?


Tags Taxes and Spending

The BBC website reports here that the U.S. Joint Economic Committee is looking at the trade taking place in interactive computer gaming societies like Second Life or Eve Online. Apparently the economies in these societies can be fairly sophisticated, the sum "GDP" rivaling small countries like Namibia, and they are becoming large enough to attract the eye of the state. The JEC claims they are not doing this with an eye toward taxing these economies:

Some players of these games have amassed huge fortunes of game currency by exploiting the quirks of the virtual world's monetary and trade systems.
There are reports that many people in nations such as China earn their entire salary by "gold-farming" in which they play the game solely to get gold which is then sold for real world money.
The JEC statement said: "Clearly, virtual economies represent an area where technology has outpaced the law. The goal of the forthcoming JEC study is to help lawmakers understand the issues involved and head off any premature attempt to impose a tax on virtual economies."

We'll see whether the government can resist taxing these societies. So far their record of foregoing taxes on transactions is not encouraging. In any case, it would be interesting to see what these economies look like, and what role a state plays in them. At least some work has been done. Here's an old Mises blog post on the subject. I'm sure there's more.

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