Is It Worth Taxing Online Economies?

Forbes Online is reporting that, at least at one point, the US Congress considered taxing online economies. Examining Second Life as a prototype MMO, it was discovered:

The potential tax dollars at play here would hardly seem worth worrying about, considering that the Internal Revenue Service estimated the annual tax gap (for 2001) at $345 billion. Moreover, the issue pales in comparison to other fights over taxes online--for example, states' continuing push to get online sellers to collect sales taxes and the Treasury Department's proposal that certain "brokers"--including presumably eBay (nasdaq: EBAY - news - people ), report the gross proceeds of active sellers to the IRS.

How small is it? According to Linden Lab, the company behind "Second Life," of the nearly 60,000 users with positive cash flow in their accounts last month, 48,000 had less than $100. Still, over 1,000 users had more than $1,000 in their accounts in March. And a small but growing number of "Second Life" users, known as "in-world entrepreneurs," are making a living off "Second Life" income, even quitting their real-world jobs. They make their money by creating things online and selling them for cash.

How about cutting Congressional salaries instead? *g*

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If we only could... they might do a better job :p