Effective tax rate

Definition:

The 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.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

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A transaction in which the settlement will occur on a specified date in the future at a price agreed upon on the trade date.

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