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Finance Dictionary and Glossary of Investment Terms
effective tax rate
Actual income tax paid divided by net taxable income before taxes, expressed as a percentage.
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.
e net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income.