This is a problem for states with tax rates around 9%. (Has a roofer or painter ever offered you a discount for cash?) With combined state-federal rates well above 30%, evasion would be rampant.
As explained in our last post on the topic, Total did manage to squeeze Chesapeake for a discount on cash it had pledged for drilling on a JV in the Barnett shale.
Most people searching for deals will ask, without embarrassment, for money off a slightly damaged product, or for a discount when paying with cash.
An investor commits to giving a company a certain amount of cash over 18 to 36 months in exchange for newly issued stock at a discount (typically 3% to 6%, more for very small outfits).
Miners and lumberjacks could use the scrip at the company store--often the only store in town--or redeem the tokens for cash, at a steep 25% discount.
Todd Roscoe, a former executive at the hospital chain Tenet Healthcare, says that a 40% discount off the inflated list price is the norm for cash-paying customers.
Tenet Healthcare ( THC - news - people ), says that a 40% discount off the inflated list price is the norm for cash-paying customers.
To discount the cash, he uses a 10% rate 3% for inflation plus a very modest 7% for the real returns he strongly believes he could get elsewhere in the stock market.
So presumably, if the deal is allowed to proceed, the ECB will ensure that all the risk actually remains with Bankia and the Spanish government - and therefore with Spanish taxpayers - by imposing a massive discount (or haircut) on the amount of cash it would exchange for the bonds.
With the holidays approaching, many consumers will find themselves at the cash register, being cajoled into signing up for store-branded credit cards in exchange for a discount.
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