First virtual reporters, now we’re looking at virtual taxmen.

LONDON (Reuters) - Users of online worlds such as Second Life and World of Warcraft transact millions of dollars worth of virtual goods and services every day, and these virtual economies are beginning to draw the attention of real-world authorities.

“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 of the U.S. Congress.

“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 told Reuters in a telephone interview.

What frustrates me about this is the fact that the people who want to tax these “virtual assets” aren’t indicating any sort of government need for that tax revenue.  They’re just indicating that there are assets out there that aren’t being taxed and talking about a way to tax them.

Is that really how we want our political leaders to approach the tax situation?  Seems to me that before any new tax gets levied, or any tax hike gets approved, government should have to demonstrate an actual need for the additional revenue.  They shouldn’t just be saying, “Oh, hey, here’s some transactions and assets that aren’t being taxed...let’s go get ‘em!”