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Author Topic: Buying new armor in World Of Warcraft should be taxed in real dollars  (Read 1891 times)
BenRayfield
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June 21, 2011, 07:15:50 AM
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Rediculous, but World Of Warcraft Gold is a real currency, like Bitcoin, just implemented a different way and connected to a game before it became a real currency. Want to buy some? http://warcraftgoldstore.com

This currency is normally used to buy things in the World Of Warcraft online game, but since it can be exchanged both directions with dollars, it should be subject to the same laws as Bitcoin, and the last I heard, if you get paid in Bitcoins you are supposed to report it on your taxes.

Can anyone give me a good legal reason why Bitcoin and World Of Warcraft Gold should be taxed differently? If not, the next purchase of armor or a flying dragon to ride on, should be reported on your taxes. When the auditor asks, tell him "Yes, I bought a flying dragon for xx World Of Warcraft Gold, but I didn't get a receipt."

There is a contradiction here. Either we are going to have to start paying sales tax for buying an extra life in a game in a simulated economy with game money, and non-player-characters taxed for spending that same game money, or Bitcoin doesn't get taxed. Which is it?

Maybe that is why governments won't touch Bitcoin. They know they can't resolve the contradiction. They must be scared out of their minds.

Until such contradiction is resolved, I suggest trading your Bitcoins for World Of Warcraft Gold (through dollars as a middle step) so you can be legally taxed on less capital, and if that works, theres no reason it wouldn't work for dollars too.

This contradiction is going to rip a hole in the legal system that they can't patch, and theres nothing anyone can do about it. Actually, there is 1 thing they can do about it... Pretend Bitcoin and World Of Warcraft don't exist. If they admit they exist and start taxing even 1 of them, the next currency will be designed inside a game to get around that, and they'll have no way around taxing game money, since it is game money, used mostly in the game and some outside.

Governments would be wise to kneel down before their corporate masters and not do anything that might threaten their simulated economies in their virtual worlds. We all know who is really pulling the strings, and nobody voted for them.

Good things will come from this. After proving that game money is interchangible with real money, the Military Industrial Complex (http://en.wikipedia.org/wiki/Military_industrial_complex) will be defeated by simulated weapons, through the simulated money they're bought with sucking the military budget and huge-government budget dry. Fight your wars in games, or we'll bring the game's simulated war into your real battlefield, economically. Don't forget, in World Of Warcraft, Blizzard Entertainment is God, and nobody would bat an eye if one of their characters walked on simulated water.

Do your lawyers dare tread in the World Of Warcraft? I really hope so, because one of those non-player-characters was racially discriminating in who he hired for his simulated dragon store. That racist a-hole said he wouldn't hire my character because he had green skin, a hump back, and large claws, which is typical of my simulated species. My whole simulated life, I've had to deal with discrimination against Orcs, and this is the last straw. I am suing for the lost potential World Of Warcraft Gold, in US Dollars please.

What we're seeing here is law hitting a brick wall made of a self-referencing logic paradox, and if you touch a paradox you are destroyed or randomized. Its all described in the Incompleteness Theorem, which applies to economic law because it applies to numbers...

http://en.wikipedia.org/wiki/G%C3%B6del%27s_incompleteness_theorems
Quote
The first incompleteness theorem states that no consistent system of axioms whose theorems can be listed by an "effective procedure" (essentially, a computer program) is capable of proving all facts about the natural numbers. For any such system, there will always be statements about the natural numbers that are true, but that are unprovable within the system. The second incompleteness theorem shows that if such a system is also capable of proving certain basic facts about the natural numbers, then one particular arithmetic truth the system cannot prove is the consistency of the system itself.

Because of the self-referencing nature of simulations of economies in games in real economies, the Incompleteness Theorem is about to rip governments a new one, and every x force they push against it will be matched by x force pulling them deeper into the paradox until they can't even calculate the first digit of their taxes.

Governments are in over their heads, and they should be incredibly thankful that Bitcoin is here to save them from the legal requirement of simultaneously proving and disproving the Incompleteness Theorem just to pay their taxes, but I guess they didn't think ahead that far. A free market, or get rid of money completely, is the only way out.

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June 21, 2011, 07:16:44 AM
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There is no reason why you should be taxed, period.
benjamindees
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June 21, 2011, 07:22:03 AM
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A flying dragon does sound suspiciously like a capital gain now that you mention it.

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June 21, 2011, 07:45:43 AM
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There is no reason why you should be taxed, period.

Income tax ? I disagree with it completely. What you earn through your blood sweat and tears is yours. We should not have the federal reserve system of debt based currency and we should not have to unwillingly be collaterial chattle for its interest repayments.

Taxed on business profits and purchases ? I agree its needed, unless you want to drive on dirt roads, dig your own water well, wade through rivers and valleys, walk around or climb mountains, burn or bury your own trash, clean your own street, act as your own police/prosecutor/judge/jury, etc etc etc. Public works infrastructure and maintenance is needed and requires funding. However I do not think you should be taxed for it if you do not use it.

"... He is no fool who parts with that which he cannot keep, when he is sure to be recompensed with that which he cannot lose ..."

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June 23, 2011, 03:03:19 PM
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What we're seeing here is law hitting a brick wall made of a self-referencing logic paradox, and if you touch a paradox you are destroyed or randomized. Its all described in the Incompleteness Theorem, which applies to economic law because it applies to numbers...

Quote
The first incompleteness theorem states that no consistent system of axioms whose theorems can be listed by an "effective procedure" (essentially, a computer program) is capable of...

As your own excerpt says, the incompleteness theorem applies to axiom systems (or things equivalent to them). Economics is not an axiom system. Economic laws are not derived from axioms. There is no application of the incompleteness theorem to any aspect of economics whatsoever.

In any event, in the United States, BitCoin transactions are subject to Federal income tax the exact same way dollar transactions are. You can either consider them sales, in which case the BitCoins are income just as foreign currency is, or you can consider the transaction as an exchange for non-currency, in which case they are taxable as barters. (Things get really complicated if they are considered non-covered securities, but the end result is roughly the same.)

(Does the IRS have any position on buying new WoW armor? Why isn't it a barter? Is it because the armor has no fair market value? If so, do BitCoins? I should ask the IRS for an official position. It would be fun.)

What bothers governments is that it's much hard to enforce laws, whether tax laws, drug laws, or the like, on BitCoin transactions. Major world governments are at war with privacy, particularly financial privacy.

I am an employee of Ripple.
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