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September 10, 2007

The Gamer’s Quagmire #50: Massively Unrepresented Taxation

Filed under: The Gamer's Quagmire — Tags: , , — crayfish @ 12:42 pm

Everything you wanted to know about gaming, and less.

by Jamison DeLorenzo

In a bold attempt at making sure that I would get back into the habit of writing something interesting on a weekly basis, focusing on the big number 50 was a good start. There is nothing quite like an arbitrary number that in reality means nothing but somehow serves as great significance for something. Perhaps churning out 50 articles over the past year and a little more is worthy of some special attention. That is, other than “Hey, why did you skip all those weeks anyway?”

So in preparation for my 50th article, which closely is coinciding with my 30th birthday which will net me several victories on a 20 dollar bet and my repeated forays in getting another character in World of Warcraft to level 70 (the numbers 40 and 60 are currently wanted for questioning for their absence in this previous attempt at being clever), I decided it might be nice to come up with some positive news in celebration of this event.

Then, I thought, why write about such unfamiliar concepts? Why write something cheery when I could just as easily find some irritating news in the gaming universe? Two pieces of news had flown past my eyes recently, one related to gaming and one not. Both have been so shocking that I have seriously started to question what poisons the otherwise cheery world of video games is safe from.

Forgive me for a moment as I dive into baseball. The person, who managed to get their hands on the Barry Bonds all-time HR baseball, as a good baseball fan should, decided to keep the baseball and enjoy it. A safe deposit box would probably be the best choice for not attracting a ton of attention at home, by the by. Anyhow, those plans were pretty quickly quashed. Using some obscurities in the law, which by now has turned my stomach at least 20 times (which has forced me to consider going into business as a pretzel vendor), our country has managed to legally place a market value on the baseball and tax this lucky owner based on the perceived price he could sell the ball for.

Luckily that $25,000 piece of chewing gum I sold last week was a private auction and any evidence has since been destroyed/digested.

Imagine having to pay thousands of dollars in taxes on an item you have no intention of selling and never even had to pay to obtain in the first place. Fine, okay, the price of the ticket to get into the stadium was the cost. How anyone can legally put a price on something that has never been for sale in any known galaxy or dimension is beyond my comprehension. It is in this one weird circumstance where I would welcome national media attention. Taxes would be daftly averted as I pondered taking a quick trip to Canada to film the ensuing destruction of the ball and its sinking into the St. Lawrence Seaway. I am no expert appraiser of water-logged baseballs torn into multiple unrecognizable pieces, but I am guessing the ball would be worth approximately $0.

I may even have to send a note of apology to fans of baseball everywhere and MLB itself for feelings of guilt on the matter.

You see, being taxed on something that has yet to cost anything bothers me. Living in a state with some disturbingly high taxes has perhaps jaded me, but as a baseball fan and a common sense fan this news really got under my skin. Imagine my frustration then upon seeing the news that Congress is currently mulling a bill that would make objects obtained and traded in online games to be considered viable for taxing.

Say what???

Maybe this is one of those headlines that is supposed to annoy me and the bill does not actually hold any real weight, but after seeing this written in multiple places I decided that my time in the online community may have to be cut drastically short. Vegas probably would have good odds on a large number of people playing these games to make a similar move.

Video games are starting to become trendy. You see them advertised on TV during prime time. You see trailers for new games along with movie trailers in a movie theater. These strides are big, but overall people still see gaming as either some strange subculture that is far too scary to understand or the next big taxable cash cow (something smokers everywhere may thank us for someday). The IRS already flagged down online purchases for taxes (where would our society be without arbitrary additional fees?), so going after another untapped well was really the logical next move.

Okay – it was a logical move from a very selective point of view.

What does hold amusement for me in this, hopefully fruitless, endeavor is how the IRS could possibly go about enforcing these taxes on the hundreds of online games that are currently in existence. Do developers have to create an IRS guild that can monitor everything in these online worlds? Do you need to approve transactions every time you kill an NPC mob? Are developers going to be forced to hand over tons of documentation on all of the looted items? Looking at World of Warcraft alone, is the IRS really going to go over 8+ million accounts, cross reference values of items, and charge people? Could they ever prove that they still have certain sellable items?

I am not going to get into the big question here, which is should these items be taxable? I refuse to look deeply into this question, because if I ever even remotely consider the answer as yes, then gaming is no longer an escape from reality. The last thing I need to deal with in gaming is making something that is entirely centered around fun and an escape from reality to be a line item on my income tax return.

It would be very easy to dive into painstaking detail on this, but it is much easier, and much more me, to simply state: the more you tighten your grip Tarkin (i.e. the IRS), the more star systems (i.e. realms of video gamers) will slip through your fingers.

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