The capital that earns a variable return--the equity, the common stock--is taxed twice.

FORBES: How The Government Subsidizes Leveraged Takeovers

In July 2002 McCombs entered into a variable prepaid forward contract with JP Morgan with 12 different tranches to be settled (with stock or cash) in 2003, 2004 and 2005. (The bank dubbed the structure Principal Installment Stock Monetization or PrISM.) In August 2002 McCombs also agreed to lend 11.3 million shares of Clear Channel to JPMorgan Chase.

FORBES: Billionaires' Taxes

With this sort of contract, the owner of a big, highly appreciated stock position gets an upfront payment from an investment firm--typically for 75% to 85% of the value of his shares--in exchange for agreeing to deliver a variable number of shares or cash in the future, with the exact amount dependent on how the stock performs.

FORBES: Billionaires' Taxes

Yes, says Strathclyde's Mr Hughes Hallett, but the stock of existing home loans (as opposed to the flow of new ones) is still mostly at a variable rate.

ECONOMIST: s for EMU | The Economist