More on the Free Software Wars
Sun Microsystems Inc.'s strategy of acquiring StarOffice and distributing it for free is a serious threat to Microsoft Corp. and is ironically similar to what Microsoft did to Netscape Communications ("Free software from anywhere?" News: Analysis & Commentary, Sept. 13). Netscape had a 90%+ share of the browser market, and Microsoft's response was to give away a similar product, Explorer. Today, Microsoft Office has a high market share, and Sun will give away a similar product.
Consumers will take advantage of this offer. Why not? If someone needed to supply his new business with computers and software, would he rather pay $2,500 to buy five people Microsoft Office, or pay nothing? Someone more adventurous could buy older computers and put (free) Linux and StarOffice on them, saving even more money.
Of course, Microsoft will also probably give Office away on the Web. But will this really help them? Office sales were reported to be 40% of revenue for Microsoft. The most ironic turn of events could be Microsoft Office use over the Web, powered by Sun Unix or Penguin Computing Inc.'s Linux servers. Of course, Microsoft could use some servers running NT; they would just need 10 times as many of them, since NT is not reliable. Either way, this development will eat into the sales of Microsoft Office, and perhaps not boost sales of NT for servers.
Sun has a good idea. Many people are ready to get off the merry-go-round of constant, expensive Microsoft Office upgrades. As for new purchasers, the choices keep improving. StarOffice runs on more operating systems than Microsoft Office does. Microsoft's only logical way to stop Sun's eating some of their lunch will be to buy Sun.
Santa Cruz, Calif.Return to top
The Lowdown on Cheap Chats
Regarding "Why talk is so cheap" (News: Analysis & Commentary, Sept. 13): The basic reason for the declining cost of long-distance communications is the advent of the communications satellite. Previously, the cost of providing such service over land was directly related to separation distance: The greater the distance, the more microwave relay stations were required. Today, thanks to communication satellites in geosynchronous orbit, the cost of linking two parties separated by 2,500 miles is the same as the cost of linking two parties separated by 250 miles. Communication satellites also are responsible for declining trans-oceanic rates, because they provide same-cost linkage over water as well as over land.
Philip J. Klass
WashingtonReturn to top
Should We Tax the Dead--and How Much?
I was disappointed with Gary S. Becker's joining the estate-tax repeal chorus ("Estate taxes: an idea whose time has gone," Economic Viewpoint, Sept. 13). I could find in his column no reason to repeal the tax other than to save taxpayers the money they spend to try to avoid it. Too bad he did not explain to us nonlaureates whether any benefits result from leveling the playing field by taxing away the meritless process which he casually describes as the "greater abilities of successful parents" being transmitted to their children. Could some entrepreneur's $1 billion in "abilities" be better taxed at death and used for public education and such, as he suggests, instead of just sprinkling it on the decedent's kiddies (whose only proven skill is often one described as being clever at selecting their parents)?
If social engineering is a legitimate use of the tax code, as he states, then Gary Becker is wrong when he writes that the time has come to abolish the estate tax. Family wealth plays a much too prominent role in relationships between the generations. Society would be far better off if family members related in a more honest and caring manner than that dictated by greed and promise of future reward.
We cannot legitimately interfere in games played by living members of families. But this does not mean we ought to encourage people to focus on how they can exert power after they die.
Also, imagine what a better place this would be if all of the productive resources of earth were being completely recycled once every generation.
Salt Lake City
Why not eliminate estate taxes as well as those on capital gains, interest, and other taxes on income from wealth and substitute a general tax on net worth? By and large, wealth, as opposed to income, is untaxed. It seems likely that there is a total of nearly $40 trillion in the U.S., with a third owned by the top 1% and twice that by the upper 10%. A progressive rate averaging 2% would yield roughly $800 billion, enough to offset eliminating these taxes as well as the punitively regressive payroll tax that supports Social Security.
Since the net worth now in equity markets is well over $10 trillion and has been yielding nearly 20% recently, a 2% tax seems much less than onerous. Decisions to buy or sell property would hinge mainly on their value in increasing wealth and not on complicated tax consequences. Why has no politician suggested similar reform as a proper subject for debate? Only Bill Bradley has suggested eliminating the payroll tax, and he hasn't said much about it lately.
Southbury, Conn.Return to top