Harvard legal scholar Christine Kim has proposed taxing income in metropolitan areas

In her research paper titled “Taxing the meta-universe,” Christine Kim argues: tax codes of different countries should cover the emerging Web3 sector, particularly meta-universes. The professor noted: the U.S. Supreme Court has previously determined that taxable income includes an undeniable increase in the size of property that is fully realized and in the taxpayer’s complete control.

If activities in metropolitan areas are not taxed, the area will become a “tax haven”. The legal expert noted the growth of investments in meta-universes, which have already exceeded $120 billion. By 2024, the market value of the sector could grow to $800 billion, Kim suggested.

Digital metavillages enable all activities and track the wealth of individuals. Therefore, metavillage users in the US can pay taxes as soon as profits are realized, including unrealized gains and income that remains in the metavillage.

Kim suggested two tax compliance strategies. First of all, platforms can withhold taxes from their users themselves. Another, less favorable alternative is payments at the place of residence. Platforms can send the necessary information to users who will be required to fulfill tax obligations on their own. Kim believes this approach could dramatically change the current U.S. tax system and also open up new opportunities for lawmakers, including those with little interest in Web3 and meta-universes.

According to a forecast by US-based Citibank, by 2030, the meta-universe market capitalization will reach $13 trillion and the meta-universe user base will grow to 5 billion people.