Average tax rate

Filed Under: Taxation

1 definition found for this term.
Definitions are presented in the order source books were published (most recent first).


The ratio of taxes paid to the tax base. Accordingly, the average income tax rate is the ratio of income tax paid to income. For example, someone who pays $10,000 in income tax on a taxable income of $50,000 would have an average tax rate of 20 percent.

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