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OPINION:
Will Microsoft Ever Give Us a Tax Break?

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Contributed by Stanislav Kelman
osOpinion.com
February 23, 2001


Is it possible to escape paying Microsoft Windows' licensing fees when you buy a Linux system?

In This Story:

Attempted Tax Evasion

Without Representation

The Laptop Dilemma

Unless you've been hiding under a rock lately, you must have heard that here in the United States we've elected a new president. You might also be aware of the fact that one of the chief issues on his agenda is a major tax cut which he is actively trying to push through the Congress.

It goes without saying that many of us would be thrilled to receive a little break on our income taxes. However, President Bush never seems to talk about the other kind of taxation, specifically the so-called "Microsoft tax." While it has been officially outlawed by the infamous consent decree of 1995, it is still next to impossible to buy an x86-based personal computer without some variety of Windows.

Furthermore, although U.S. tax laws are rather convoluted, their texts are openly available to the public. On the other hand, nobody but the select few really know what PC manufacturers actually pay Microsoft for the privilege to preinstall Windows.

About the only thing that we can be sure of is that there are two main "tax brackets." The "rich" corporate users shell out more to get Windows 2000, while the "poor" consumers have to get by with Windows 98/Me.

Attempted Tax Evasion

Obviously, with Linux gaining momentum in recent years, it has become a lot easier to get a Windows alternative preinstalled on systems supplied by major manufacturers. However, out of the top five PC makers in the U.S., which together control about two thirds of all the domestic shipments, only two offer such an option for non-server configurations.

Dell is leading the way with a wide selection of Dimension desktops and OptiPlex managed PCs available. They also offer Red Hat Linux on many of their laptops. IBM, on the other hand, preinstalls Caldera OpenLinux on some ThinkPad T-series notebooks, but I couldn't find any NetVista desktops that wouldn't have a Microsoft OS on them.

As for Compaq, HP, and Gateway, they simply "recommend Windows 2000 for business," although all provide some kind of Linux support, mostly geared towards servers and high-end workstations.

Without Representation

So, can you really escape paying a licensing fee to "Da Man" when you buy one of the above mentioned Linux systems? Let's find out!

To answer this question, I first tried to configure two identical mid-range Dell Dimension 4100 systems, one with Windows Me and the other with Linux. It turned out that it didn't matter which OS I chose, but US$1,539 would buy me the following: Intel PIII 933MHz, 256MB SDRAM, 20GB hard drive, 48x CD-ROM, SoundBlaster 64V, 3Com Ethernet, 19" FD Trinitron monitor, and Harman/Kardon speakers.

However, the Linux machine comes with "no bundled software installed," while the Windows configuration sports Microsoft Office 2000 SBE, Norton AntiVirus 2001, Trellix Web, and NetObjects 5.0.

In other words, I would pay the same amount of cash for freeware Linux as I would for Windows Me with a boatload of commercial software. Obviously, this money is not going to Red Hat, so the only feasible explanation is that Microsoft still gets a licensing fee regardless of whether or not a user chooses its software.

It came as no surprise to me that buying a Dell with Linux was not going to be any cheaper, but luckily this is not a dead-end situation. After all, I build my own PCs, so I can easily avoid paying the "Microsoft tax" whenever I need a new desktop computer.

The Laptop Dilemma

The situation is totally different when it comes to portables, since there is no way I could put one together myself. So I looked at what IBM, my personal all-time favorite, has to offer in this department.

The ThinkPad T21 turned out to be the only model that is currently shipping with Linux as well as Windows. All machines come with PIII 800MHz, 128MB SDRAM, 20GB hard drive, 8x DVD-ROM, and 14.1" TFT screen. However, Linux and Windows 2000 configurations are priced at $3,249, while the Windows Me unit is $100 cheaper.

Interestingly enough, DVD is not officially supported under Linux, so it is rather strange that IBM chose to include it anyway.

In other words, even if I wanted to exclusively use Linux on my laptop, I would still have to pay the "tax" to the almighty Microsoft. That is, of course, unless I considered Apple's offerings. In fact, for just $3,199 I could order a Titanium PowerBook G4 with a top-of-the-line 500MHz PowerPC processor, a 15.2" mega-wide TFT screen driven by an ATI Rage Mobility 128 card, and all the storage options of the above-mentioned ThinkPad (sans a floppy).

The problem is that these beauties are so wildly popular, they are just about as hard to get a hold of as the new Sony PS2s. Not that I was planning to replace my iBook anytime soon.

Talkback Forum


Author's background:
Stanislav Kelman is a law abiding citizen who pays his share of federal, state, and local taxes as a resident of the City of New York. He maintains a list of his past technology-related editorials on TechOpinion.org. He also invites you to visit LetItBe.org, a site where you can learn more about him than you might care to know. Stanislav would love to hear your reaction to his opinion columns, so feel free to drop him a line at osOpinion@letitbe.org

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