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.

A.K. Siewers
Santa Cruz, Calif.

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
Washington

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)?

Richard Frome
New York


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.

Darrell Prows
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.

F. Morehead
Southbury, Conn.

Why Capital Can't Sit Still

Few whose money is professionally managed care much about the businesses in which their manager invests. All they want is steady returns, often at unsustainable rates (''When capital gets antsy,'' Management, Sept. 13).

The price of even the best-managed companies seldom goes straight up. Money managers can't sit tight and exceed clients' often unreasonable expectations. So they sell and buy what analysts say is ''poised to move sharply higher.''

CEOs only have themselves to blame. Make those who exercise stock options hold the share for one or two years before selling. Quit supporting the stock price by buying back shares at prices at which new stock ought to be sold, and pay a decent cash dividend to those willing to hold the shares.

William N. Briegel
Redford, Mich.

Who Pays for the Right to Sue an HMO?

''HMOs are beginning to look vulnerable'' (News: Analysis & Commentary, Sept. 13) implied that if the right-to-sue bills are passed, HMOs would lose and consumers would win. In reality, HMOs are financial disbursement intermediaries for Corporate America and its employees. If one of these bills passes, HMOs will simply raise rates to employers by about $250 per year per employee (including family).

In turn, employers will pay their employees $250 less than they would have. The real losers will be the 99.9% of consumers (employees) who have no interest or need to sue but who will be financing this new ''right'' whether they want to or not. An alternative is to give employers and employees the option to buy a special policy with the ''right'' to sue. In this way, those who wish to purchase this ''right'' can do so without burdening those working people who do not wish to spend $250 for a ''right'' that may not mean as much to them.

Kenneth S. Abramowitz
Sanford C. Bernstein & Co.
New York

A Shareholder Eyes Barbie's Bottom Line

As a longtime, albeit relatively small, Mattel Inc. shareholder (225 shares), I was once a big fan of Jill E. Barad's but have lost patience as she continues to blame Mattel's problems on everyone else rather than accepting responsibility as CEO (''Searching for turnaround Barbie,'' The Corporation, Sept. 6). I am also tired of hearing her excuse that as a woman, she is attacked by the media and faces gender discrimination. Sorry, Ms. Barad--I don't care if the company head is male or female, I just want Mattel's stock price back above $40.

Richard V. McCune
Los Angeles

''Emerging Markets: Tread Carefully'' (Global Investing, Sept. 13)

In ''Emerging Markets: Tread Carefully'' (Global Investing, Sept. 13), the name of Sappi Ltd., a South African wood-products and paper manufacturer, was misspelled. Based on inaccurate data provided to Bloomberg Financial Markets by Nelson Information, we published an incorrect price-earnings ratio for another South African concern, Palabora Mining Co. Its current p-e ratio is 5.3.