Tesla announces cheaper way into a Model S

NEW YORK (CNNMoney)

Under the plan, Model S buyers will be able to purchase the car without making a large down payment and will be able to sell it back for a guaranteed value after three years.

Tesla (TSLA)'s plan is designed to mimic the benefits of a lease: low initial cash outlay plus no worries about the car's eventual resale value, while allowing buyers to actually own the car outright. In a traditional lease, the bank or financing company actually owns the car and the driver essentially rents it for the period of the lease.

US Bank and Wells Fargo have agreed to finance 90% of the purchase price of the Model S, according to Tesla. The buyer will make the 10% down payment. With Model S prices starting at $70,000 to $100,000, the down payment could be entirely -- or almost entirely -- covered by a $7,500 federal tax credit for plug-in cars.

"You can buy a Model S for no money down net of the tax credit and for $500 a month," Tesla chief executive Elon Musk said in a conference call.

The $500 a month figure was calculated to include savings derived from not using gasoline. Also, among other factors, the company included the time saved from not pumping gas, estimated to be worth $100 a month.

The actual monthly payment, before subtracting all the savings, would be around $1,200 for a customer with excellent credit, according to a cost calculator on the TeslaMotors.com Web site.

While this financing plan might attract customers committed to purchasing, rather than leasing, a luxury car, it's still not likely to sway those who intend to lease, said Alec Gutierrez, an analyst with the automotive Web site KBB.com. Leasing still costs less per month to begin with, he pointed out, and about half of all luxury car customers lease their cars rather than buying them.

BMW shoppers with great credit can currently lease an all-wheel-drive BMW 7-series sedan, a car costing over $80,000, for about $780 a month, according to Gutierrez.

Tesla also wanted to ease customer concerns about the eventual resale value of a plug-in car, Musk said.

After 36 months, the buyer will have the right, if he or she wishes, to trade in the Model S for the same residual value percentage as a Mercedes-Benz S-class luxury car. If a Mercedes S-class is worth 43% of its original value after three years and a Model S owner wants to sell his car after three years, he would be guaranteed to get at least 43% of the Tesla's original purchase price.

The guaranteed residual value is the most striking feature of the plan, said Gutierrez. Residual values for plug-in electric cars, still largely an unknown, remain a big risk factor for buyers.

Mercedes is partnered with Tesla Motors which provides the electric power components for Mercedes' B-class electric plug-in car.

Tesla recently announced it expects to soon announce its first quarterly profit based on better-than-expected sales of the automaker's Model S plug-in luxury sedan.

First Published: April 2, 2013: 5:55 PM ET

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J.C. Penney CEO's pay slashed as company struggles

NEW YORK (CNNMoney)

The department-store chain revealed Tuesday that Johnson, its CEO, received a total of $1.9 million in compensation for 2012, down from $53.3 million in the year prior. None of the company's senior executives received bonuses, J.C. Penney said in a securities filing, "due to the company's financial results versus its goals."

Johnson's compensation dropped sharply from 2011 to 2012 in large part because he received a special $52.7 million stock award upon joining the company. He did not receive any stock award for 2012, and got only 44% of his target cash compensation in view of the company's poor results.

JCPenney (JCP, Fortune 500) shares have plunged nearly 60% over the past year as Johnson -- a former Apple (AAPL, Fortune 500) executive who spearheaded the tech giant's retail strategy -- has struggled to lead a turnaround effort. He took over at J.C. Penney in November of 2011 and has since announced a series of new initiatives including overhauled prices, redesigned store layouts, and even free haircuts for kids.

So far, the results have been dismal. The company has been suffering steep losses, bleeding $427 million in the fourth quarter as sales fell 28% versus a year prior.

Speaking to analysts in February following the release of these results, Johnson acknowledged having made "big mistakes" in 2012, but said the company had made "great strides" in improving its "cost structure, technology platforms and the overall customer experience."

It's not like Johnson's starving, of course. Apart from his base salary of $1.5 million, his compensation included more than $344,000 for "personal use of corporate aircraft," and nearly $30,000 for "home security systems."

Johnson's lieutenants and former Apple colleagues, Michael Kramer and Daniel Walker, joined J.C. Penney along with him in late 2011 and also had their compensation cut significantly. Kramer, J.C. Penney's chief operating officer, received roughly $1 million in compensation for 2012, down from $33.4 million, while Walker, the company's chief talent officer, got $731,000, down from $20.2 million for 2011.

Like Johnson, both Kramer and Walker received large stock awards in 2011 upon joining the company, and did not receive any for 2012.

First Published: April 2, 2013: 6:47 PM ET

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Jay-Z's latest venture: Sports agent

Jay Z (center) has expanded his business interests into opening a sports management agency.

NEW YORK (CNNMoney)

Roc Nation, the entertainment company Jay-Z founded in 2008, is launching Roc Nation Sports, a sports management company that will partner with another leading agency, Creative Artists, to represent the famed ballplayer.

Cano, who had previously used agent Scott Boras, is due to be a free agent at the end of the current baseball season, which will allow him to sign with any team. He is likely to be the most sought after member of this year's free agent class, and his likely nine-figure contract will mean not only a huge payday for Cano, but also for his new agency.

Roc Nation has centered around the music industry, managing artists, songwriters, producers and engineers. It's also in the business of music publishing, touring and merchandising, and has a music label, Roc-A-Fella Records. Jay-Z was named one of Fortune's 50 "Businesspersons of the Year" in 2012. He sold his clothing line, Rocawear, to Iconix (ICON) in 2007 for $204 million.

Related: Jay Z - Don't knock success

This is not Jay-Z's first foray into sports. He is a minority owner of the National Basketball Association's Brooklyn Nets, which moved from New Jersey to the new Barclays Center arena in his native borough this season.

"Because of my love of sports, it was a natural progression to form a company where we can help top athletes ... the same way we have been helping artists in the music industry for years," said Jay-Z in a statement. He is also known as a huge Yankees fan, having performed at Yankee Stadium before one of their 2009 World Series games.

SI.com: Cano signing with Jay Z should keep him with the Yankees

This is an unusual setback for Cano's former agent, Scott Boras, who has a reputation as one of the toughest agents in sports, and typically gets top dollar for his clients. A woman in Boras' office said he did not yet have a statement on Cano's move.

CAA has a large sports management business of its own, and represents some of the world's top athletes.

First Published: April 2, 2013: 4:26 PM ET

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The robot garage

(Fortune)

As you pull into a parking bay, you stop your car atop a large steel tray. Next, punch your code into a panel, and the Boomerang system knows who you are and if applicable, can charge your account with any parking fees. At that point a battery-powered robot, about as big as a king-size mattress, but much thinner, slides under the tray and lifts the vehicle two inches above the floor.

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Madoff victims get back another $500 million

Another half a billion dollars has been returned to victims of Bernard Madoff's Ponzi scheme.

NEW YORK (CNNMoney)

That means that a total of $5.44 billion has been returned to victims of Madoff.

But more than four years after Madoff's conviction, more than two-thirds of the stolen money is either unaccounted for, or is yet to be returned to burned investors.

Investigators say that $17.5 billion was lost to Madoff's scam, which crumbled with his arrest in December 2008. Since that time, investigators have recovered assets -- including property, jewelry and a yacht -- and reached settlements totaling some $9.32 billion.

Related: Madoff ruined thousands, including his son

Many of the victims are still awaiting compensation. The trustee said that 1,106 accounts have been fully compensated, out of a total of 2,178 victims.

Meanwhile, Ponzi mastermind Madoff languishes in a federal prison in Butner, N.C. He pleaded guilty in March 2009 to running a massive scam and was sentenced to 150 years.

His brother Peter recently began a 10-year sentence for helping to cover up the scheme.

First Published: April 1, 2013: 2:31 PM ET

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Top income tax rate: How U.S. really compares

Click image for interactive: See how the combined top rate in United States stacks up against those in other economies.

NEW YORK (CNNMoney)

But they might feel a little better if they considered Denmark.

To avoid catching the attention of the IRS, beware of these pitfalls.

Or the United Kingdom.

Or Austria.

Or many other economies where the top income tax rate -- factoring in both the national and local tax bite -- is higher than the highest combined rate in the United States and also hits people lower down the income scale.

Related: When top rate kicks in

At 60.2%, Denmark last year had the highest top personal income tax rate among the 34 countries in the OECD, an organization of developed and emerging countries. And that 60.2% applied to income over roughly $55,000.

That's a bigger bite than wealthy Californians face on their paychecks and other earned income.

California, which recently raised taxes on the wealthy, now has the highest combined federal and state income tax rate in the United States. It was 43.6% in 2012 and has gone up to 47.6% this year, according to Tax Policy Center Fellow James Nunns. (Nunns' calculations account for the deductibility of state income taxes on federal returns, lowering the overall rate.)

That top combined rate only kicked in, however, on income over roughly $400,000, which is more than seven times the Danish income threshold.

In fact, only three OECD countries -- Korea, Canada and Spain -- imposed their top rates on an income level above that in the United States.

The vastly different income levels at which top rates begin to bite is one reason why consideration of top rates alone doesn't offer a true picture of tax liability.

The United Kingdom and Austria, for example, both imposed top combined rates of 50% in 2012, according to the OECD data. The United Kingdom, however, only applied that rate to income over $221,424. Austria, by contrast, applied it to income over $96,374.

Another advantage in the United States: Seven states don't impose any state income tax, so the highest income earners there are only subject to the 39.6% federal rate. Their actual top rate would be lower if they deduct the state sales taxes that they pay.

Related: Which state has the highest income tax rate?

But even the top rate and income threshold factors offer only a partial view of tax liability.

For instance, there are social insurance taxes -- such as Medicare and Social Security in the United States.

And there's potentially one of the biggest tax hits to everyone's wallet -- sales taxes.

Here again, Denmark takes the danish. At 25%, it imposes one of the highest national sales taxes in the European Union and the OECD. The so-called value added tax, or VAT, is applied to most goods and services.

All OECD countries have a VAT, except for the United States. Here, how much one pays in sales taxes depends on where one lives.

Sticking with the California example, the state imposed a 7.25% general sales tax in 2012 (food and prescription drugs were exempt). At the local level, up to 2.5% in local sales taxes were added to the tab.

Investment taxes are another factor.

So, too, are tax breaks, which can lower a high-income filer's burden.

The issue of how much the rich should pay in taxes is a perpetual one. But the continued wrangling over deficit reduction and tax reform will keep it front and center in the United States over the next year.

First Published: April 1, 2013: 3:37 PM ET

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Meet the 'Boomstick,' baseball's largest hot dog

NEW YORK (CNNMoney)

Named after the bat used by Texas Rangers slugger Nelson Cruz, the $26 Boomstick is a 2-foot all-beef hot dog, smothered in chili, nacho cheese, jalapenos and caramelized onions, all on top of a massive potato bun. The whole thing weighs in at 3 pounds.

To avoid catching the attention of the IRS, beware of these pitfalls.

The ballpark sold nearly 20,000 of the monster hot dogs during the 2012 season — the Boomstick's inaugural year — raking in an estimated $500,000 in sales.

"We knew it was going to be a fun novelty type item, but it just really took off," said Shawn Mattox, the general manager for Delaware North Sportservice, which runs food operations at Rangers Ballpark in Arlington, Texas. "It quickly became a fan favorite."

Related: Hot dogs and beer: See what $20 buys at the ballpark

After a large hot dog dubbed the Texas Rangers "Big Dog" sold well during 2011 playoffs, Mattox's team decided to top that, with the 24-inch beast. "'We're Texas,' I said. 'I want to have the biggest hot dog,'" Mattox recalled telling his staff.

They hit a roadblock when they discovered that they couldn't find a company that made hot dogs -- and buns -- so large. Not to be stopped, they partnered with a local food services company and a bakery to custom make the super-sized hot dogs and buns.

The Boomstick was so popular that Delaware North introduced the giant hot dog at six other MLB stadiums for the month of July under the name the "Giant Slugger."

To build upon the Boomstick's success, Rangers Stadium will sell Boomstick lapel pins and plush toys. And a "24"-themed food stand will be opened, featuring a variety of super-sized menu options.

Related: 10 things you'll pay more for this year

The Boomstick will be joined by the "Totally Rossome" Boomstick ($32), named after Rangers relief pitcher Robbie Ross, which is smothered with smoked brisket, fresh pico, sour cream and Doritos chips. Also on the menu is a whopping 24-ounce bacon burger ($26), a 24-inch sausage ($26), a 24-inch pretzel ($13) and a 24-inch quesadilla ($26) covered with brisket and served on a bed of nacho cheese Doritos.

"When we first started talking about it, I was like gosh that's a lot of meat," Mattox said of the 1-pound burger topped with 8 ounces of bacon, grilled onions and cheese, dubbed "The Beltre Buster" after Rangers third baseman Adrian Beltre.

Mattox said he's not sure what the massive eats come in at nutrition-wise, but acknowledged it's got to be close to a day's worth of calories.

While some brave fans may attempt to tackle the food alone -- as one who devoured a Boomstick in less than four minutes did in an eating contest last year -- Mattox said the "24" menu items are really meant to be shared among friends or family.

"There are those that have the badge of honor and will over the course of several innings eat the whole thing," he said. "God bless them, but it's not really designed for that."

First Published: March 31, 2013: 10:21 AM ET

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Stocks: Jobs take center stage

Click the chart for more stock market data.

NEW YORK (CNNMoney)

Markets have been reacting well to the broader recovery. The S&P 500 finished last week at a new high, after flirting with the milestone for weeks. The Dow Jones Industrial Average has been trading at record highs since early March.

This week, investors will have their eye on the state of the U.S. job market, starting Wednesday with a report from payroll processing firm ADP on employment change, followed by Challenger jobs cuts and initial claims. All of these lead up to the closely watched monthly jobs report from the Labor Department on Friday.

Related: State unemployment rates

Economists surveyed by Briefing.com are expecting the U.S. economy to have added 178,000 jobs in March and the unemployment rate to hold steady at 7.7%.

This would mark a pull-back from the February jobs report, in which the Labor Department reported that the economy added 236,000 jobs, much stronger than the 119,000 added in January.

A report on construction spending is also slated to be released this week. Last month's jobs report showed that the sector was one of the brightest stars in the labor market.

Related: Fear & Greed Index

Investors will also get to see whether the growth in jobs has led Americans to feel better and spend more. Auto and truck sales and consumer credit are due out on Tuesday and Friday, respectively.

Data about how Americans are spending has been closely watched since the beginning of the year, because people had expected the payroll tax and delayed income tax refund to thin out wallets.

But stocks are at all-time highs, spurred by stronger job growth and rising home prices, and that's had consumers feeling more optimistic about the economy recently.

The Commerce Department reported last week that personal incomes rose 1.1% in February, while spending rose 0.7%.

Last week, stocks wrapped up a stellar first quarter. The Dow rallied more than 11% and booked its best first quarter since 1998. The S&P 500 soared 10% and the Nasdaq was up 8%.

First Published: March 31, 2013: 1:01 PM ET

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China's manufacturing sector adds momentum

HONG KONG (CNNMoney)

HSBC's manufacturing index rose to 51.6 from 50.4 in February, slightly weaker than its initial "flash" estimate of 51.7. A reading above 50 signals expansion in the manufacturing sector.

China's official PMI also posted a gain, rising to 50.9 from 50.1 in February. The index is now at its highest level in 11 months.

"China's recovery continues, mainly driven by the gradually improving domestic demand conditions," said Hongbin Qu, chief China economist at HSBC. "The decline in input prices suggests a modest pace of demand recovery and moderating inflationary pressures."

The strength of manufacturing in China is considered a barometer of the global economy because of the nation's role as a powerhouse exporter. Because it makes up a large part of China's economy, manufacturing plays an important role in shaping domestic policy.

Related story: U.S. companies betting big in China

China's economy has averaged growth of around 10% a year for the past three decades, allowing the nation to rocket past competitors to become the world's second-largest economy.

While the growth slowed in 2012 to 7.8%, that figure topped government targets and analyst expectations, signaling an exit to the slowdown that had worried economists.

But China's new leadership -- President Xi Jinping and Premier Li Keqiang -- inherits a country facing challenges over the environment, the rule of law and economic inequities.

The path forward, most analysts agree, requires China to move toward an economy in which consumption drives growth -- no easy task.

Local party officials have long depended on investment spending to maintain clout -- a pattern that reform would undercut. The shift could also undermine the breakneck pace of economic expansion to which China has grown accustomed, at least in the short term.

First Published: March 31, 2013: 10:48 PM ET

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Incomes bounce back in February

NEW YORK (CNNMoney)

Personal incomes rose 1.1% in February, while spending rose 0.7%, the Commerce Department said.

Both figures were larger than expected. Economists were expecting a 0.8% rise in incomes and a 0.6% gain in spending, according to consensus estimates from Briefing.com.

The surprise jump in take-home pay came after incomes plunged 3.7% in January, driven lower by certain "special factors," the government said.

Incomes in January were depressed by the expiration of the "payroll tax holiday," as well as bonus and dividend payments that were made early in anticipation of tax hikes that took effect in 2013.

Excluding these factors, personal income increased 0.4% in February.

Meanwhile, personal spending continued to rise despite higher payroll taxes.

"We have yet to see the effect of increased payroll taxes on outlays," said Tanweer Akram, senior economist at ING U.S. Investment Management.

Stronger job growth, rising home prices and stocks at all-time highs have consumers feeling more optimistic about the economy recently. But it remains to be seen whether this increase in wealth will translate to a sustained rise in spending, Akram said.

"I'm cautiously optimistic, but I don't expect strong spending this year," he said.

Friday's report came one day after the government said U.S. gross domestic product rose at a 0.4% annual rate in the final three months of 2013. That was better than the previous estimate of 0.1% and the initial reading, which showed a 0.1% decline.

First Published: March 29, 2013: 10:35 AM ET

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