What Does Effective Tax Rate Mean?
The rate a taxpayer would be taxed at if taxing was done at a constant rate, instead of progressively.

Calculated as total tax paid divided by taxable income.

Investopedia explains Effective Tax Rate
This is the net rate a taxpayer pays if you include all forms of taxes.

Filed Under: Taxes

Related Terms

Income Tax
Marginal Tax Rate
Progressive Tax
More Related Terms

Related Links

Laffer Curve Key To Ideal Tax Rate - Feel like the government always has its hand in your pocket? Learn the theory behind how it decides how much to take.
How International Tax Rates Impact Your Investments - International investors need to be aware of the staggering correlation between tax rates and economic performance.
How does the marginal tax rate system work?

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