Tax Rate

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Tax Rate


the amount of tax levied per unit of taxation, for example, per hectare of land or per ruble of income.

The tax rate expresses the norm of tax collection and is set by legislation. Tax rates may be fixed, proportional, progressive, and regressive. Fixed tax rates are established as an absolute sum per unit or object taxed, regardless of the amount of income, and are ordinarily used in taxing small plots of land. In the USSR, fixed rates are applied in collecting the agricultural tax on the private plots of kolkhoz members. Proportional tax rates are set at a definite percentage of income, regardless of the total amount. In the USSR, for example, proportional rates are used to levy an income tax on the income earned by consumer cooperative societies.

Progressive tax rates increase as the amount of taxable income increases. A distinction is made between simple and complex, or sliding, progressions. Under a simple progression, the rate increases with the amount of taxable income and is applied to the total amount of income or total value of the object being taxed. Under a complex progression, the rate increases only for the portion valued in excess of a predetermined preceding step. Progressive rates are used primarily in the levying of income taxes on the populace of the USSR and foreign countries.

Regressive tax rates diminish as the amount of income increases. Regressive taxation is clearly seen in the mechanism of indirect taxes on consumer goods that exists in every capitalist country. Under capitalism, special tax rates are frequently used to give certain advantages to large companies and corporations.


References in periodicals archive ?
It is interesting to note that from 1979 through 2000 the average tax rate for the highest quintile and the top 5 percent of the income earners trended upward, while the average tax rate for the remaining quintiles trended down.
The average tax rate is calculated as total tax divided by total income for each CU.
At the 2009 average tax rate of 12 percent on adjusted gross income, that amounts to a tax savings of $912, or $76 a month.
This section compares the average tax rates and average expenditure rate to form an idea of the fiscal adequacy of these countries.
Where tjy measures national average tax rate for tax source j (j=l to n) in year y
However, the progressive structure allows lower income households to pay at a lower average tax rate than higher income households, thereby shifting the financial burden of government to higher income households.
According to an analysis by USDA's Economic Research Service, changes to the tax code that were put in place in 2001 have reduced average tax rates for all farm households and resulted in the lowest tax burden on farm income and investment in a decade.
If 25 percent of the company's global profit is allocable to Taiwan and Malaysia and 65 percent to the United Kingdom at a 30-percent tax rate, and 10 percent to local sales companies at an average tax rate of 30 percent, the company's natural effective tax rate will be 0.
An increase in this parameter would reduce the relative size of government by reducing both expenditures for general government services and the average tax rate with only a small net effect on total output.
The household model implies that at the state average tax rate, the minimum assessed value required to receive a circuit breaker credit is about $227,000.
In analyzing the impact of taxes on economic growth it is important to distinguish between average tax rates and marginal tax rates (Besci 1996).
The estimation of Equation (2) was carried out with an IV for the average tax rate in a two-stage least squares (2SLS) regression with robust standard errors.