Congress to Look at Virtual Economies

From Second Life Reuters:

Booming virtual economies in online worlds such as Second Life and World of Warcraft have drawn the attention of a U.S. congressional committee, which is investigating how virtual assets and incomes should be taxed.

"Right now we're at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise - taxes, barter exchanges, property and wealth," said Dan Miller, senior economist for the Joint Economic Committee. "You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there's no mechanism by which you're taxed on this stuff," he said.

The increasing size and public profile of virtual economies, the largest of which have millions of users and gross domestic products that rival those of small countries, have made them increasingly difficult for lawmakers and regulators to ignore.

For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month.

"Ownership, property rights, all that stuff needs to be decided. There's just too much money floating around," game designer Sam Lewis, who trained as an economist and has worked on games such as Star Wars Galaxies, said in a telephone interview. "The tax laws don't know how to behave because these are virtual items: ones and zeros on a database we're allowing you to play in," he said.

Interesting. If I'm a Master Jewelcrafter, I certainly hope I don't get taxed on every ring or jewel I sell. That would suck.

I'm assuming this just applies to RMT (Real Money Transfer) but... what about potentiality? I haven't sold my WoW character, nor do I intend to--but I very well could, and I'd make money off it too. If I were, say, the aforementioned Master Jewelcrafter, couldn't I sell my services for in-game cash which I would then sell? (Maybe not the most efficient way of getting money, but still...)

I'm kinda interested about how this will go down.