Path: utzoo!utgpu!jarvis.csri.toronto.edu!rutgers!usc!snorkelwacker!spdcc!merk!xylogics!world!bzs
From: bzs@world.std.com (Barry Shein)
Newsgroups: news.misc
Subject: Re: The Rape of Usenet (an alternative view)
Message-ID: <1989Dec21.235352.4566@world.std.com>
Date: 21 Dec 89 23:53:52 GMT
References: <946@crash.cts.com> <6576@brspyr1.BRS.Com> <1989Dec21.024040.25157@athena.mit.edu>
Organization: The World @ Software Tool & Die
Lines: 54
In-Reply-To: jik@athena.mit.edu's message of 21 Dec 89 02:40:40 GMT


And furthermore...

From: jik@athena.mit.edu (Jonathan I. Kamens)
>  FSF charges to cover the cost of the tape and the cost of copying
>it.  They do not charge to make a profit; that would be completely
>against what they stand for.
>
>  GEnie charges to make a profit.  Therefore, you just can't compare
>GEnie to FSF.

I'm sorry, but is this a tax law argument? What do you mean by
"profit"? When does a dollar taken in suddenly become "profit"?

For example, MIT averages about $400M/year in DOD research funds
alone. But not one nickel of that is considered "profit". Why? Because
the federal tax codes say so, and they couldn't be wrong. Genie could
be losing money like a sieve loses water, but they're "for-profit".
Why? Because the federal tax codes say so.

The IRS defines "profit" to be that amount of your revenue which is
left over after expenses are paid and (after taxes) redistributed to
your investors. Now, I can sell something very cheaply and be a
for-profit corp while someone else can sell something very expensively
and be a not-for-profit corp.

For example, K-mart usually sells appliances at a minimal markup, but
they're for-profit. MIT charges among the highest tuitions in the
world, but they're not-for-profit. Got it?

It all has to do with how you distribute your (potentially) excess
cash. A for-profit returns it to the investors. A not-for-profit
doesn't. There are some other differences (such as the maximum amount
of cash you can have on hand), but they're not germaine and trivial to
get around by the not-for-profits.

A not-for-profit might, oh, pay their provosts and VP's $200+K/year,
buy up real-estate in Cambridge and displace working people or
purchase a $10M super-computer or even invest in a, oh, what the heck,
lisp machine company (I have no one in particular in mind, just an
example I made up.) But it's not !PROFIT!, ask any tax lawyer. They
don't have shareholders. I realize it's subtle, you have to understand
the tax laws jik is alluding to.

>  Yes, but as I have said in a previous posting, when you pay for the
>phone, or the modem, or the Intenet, or the disks, you GET SOMETHING
>BACK.

Oh, I get it, you mean you PROFIT from it.
-- 
        -Barry Shein

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