Law Commons^™

Ability-To-Pay And The Taxation Of Virtual Income, Adam S. Chodorow

Adam S Chodorow

Whether to tax virtual income raises a vexing question. Most people’s intuition suggests that virtual income should be exempt from tax, but the real-world economic value inherent in such income suggests otherwise. Those who have considered the question to date have attempted to justify non-taxation using either an intent-based or imputed-income approach. In this Article, I argue that neither of these approaches nor the proposals they produce are fully satisfactory. Using the ability-to-pay principle, I offer a new approach to this question, which better conforms to existing tax policy and doctrine and produces a more administrable proposal than those made …