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18 November, 19:24

The effective tax rate is Equal to the taxes paid divided by taxable income. The percentage of tax payable on the last dollar of income received. Never higher than the nominal tax rate. Always equal to the marginal tax rate.

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  1. 18 November, 19:42
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    The correct answer is: Equal to the taxes paid divided by taxable income.

    Explanation:

    The effective tax rate is the ratio of the total tax burden of an individual and their taxable income. It is considered as a better representative of the tax burden of an individual than the marginal tax rate.

    It shows the average rate at which an individual's income and assets are taxed. The effective tax rate of an individual is lower than the marginal tax rate.

    To calculate the effective tax rate, the individuals can add their total tax burden and divide the sum by their taxable income. It represents the percentage of taxable income that an individual has to pay as taxes.
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