Because in the old system, while the top tax rate was 50%, many of the wealthy paid closer to an effective tax rate of 20% because of all the loopholes.
Boeing's after-tax profits were dragged down by the reversion of its effective tax rate from a favourable 27% of earnings in 2011 to a more normal 34% last year.
In a little-known provision of the Act, Congress extended the effective tax rate of zero percent on the sale of qualified small business stock (Section 1202 stock).
FORBES: A Pullback Is Coming But Here Are 8 Reasons To Stay In The Market
These combine for an effective tax rate of 33.5 percent, very close to the above situations, and your slight federal tax advantage is likely offset by a disadvantage at the state level.
Those returns between the bottom 50 percent and the top 25 percent pay an average effective tax rate of only 5.6 percent, accounting for only 11.8 percent of all federal income tax revenue.
FORBES: President Obama's Growth-Choking Animus Toward Success
According to an Internal Revenue Service study, back in 1995, when the top long term capital gains tax rate was 28%, the 400 taxpayers with the highest reported incomes paid an average effective tax rate of 30% of AGI.
FORBES: The Real Reason The Buffett Rule Would Raise Only $47 Billion
Mitt Romney's father, George Romney, paid an effective tax rate of nearly 37% in 1967.
The government has steadily dished out waivers to favoured industries: tourism pays an effective tax rate of 5%.
The truth is, though, that the proposed bill excludes countries with an effective tax rate of greater than 7%.
If Helman made that comparison for ExxonMobil, he would have gotten an effective tax rate of roughly 13 percent.
And that would apply to somebody paying 15 percent -- an effective tax rate of 15 percent on millions of dollars of income.
Since the Bush tax cuts of 2003 reduced both the capital gains and dividend rates to 15%, the top 400 have been paying an effective income tax rate of only around 18% of AGI.
FORBES: The Real Reason The Buffett Rule Would Raise Only $47 Billion
In 2011, Vice President Joe Biden and his wife, Dr. Jill Biden, paid at an effective tax rate of 22.9%, while Republican vice-presidential candidate Rep. Paul Ryan (R-Wisc), and his wife, Janna, paid at a 20% rate.
FORBES: On 2011 Federal Income Tax Return, The Romneys Decide Horse Losses Are Personal
However, most tools will use the marginal rate of your highest tax bracket rather than your effective tax rate.
The effective rate of its federal and local corporate tax will fall only to 32.7% (from 38.7%), still a hefty bite out of profits.
It provides support for arguments by U.S. companies that they face a competitive disadvantage in the U.S. marketplace, since most non-U.S. multinationals except Japan already have lower taxes before the added bonus of an effective tax rate reduction when they establish an American subsidiary.
FORBES: A Cross Country Comparison Of Corporate Income Taxes
From their database, the authors find that a one percentage point difference in taxes results in a 0.225% reduction in the share price at takeover, and calculating backwards this indicates that the effective tax rate is 31% of the statutory one.
And they almost never note that the statutory tax rate applies only to the last dollar earned or that the effective tax rate is substantially lower even for the richest taxpayers and largest corporations because of tax exclusions, deductions, credits and the 15 percent top rate on dividends and capital gains.
FORBES: Top Reagan Advisor Calls Out The GOP For Lying About Taxes
For families in high-tax states, it can raise their official 33% tax rate to an effective rate of 38%.
Over the two years, Romney's effective tax rate -- the percentage of his income that he owed in federal income taxes -- was 14.5%.
CNN: Romney condemns Obama's 'assault on our economic freedom'
Chidambaram, while announcing the federal budget for the financial year starting April 1, proposed a so-called surcharge that would push the effective income-tax rate for a select group of taxpayers to about 34% from the current 30.9%, according to tax experts.
Thirteen of the 17 countries with enough observations to compute annual effective tax rates in both 2009 and 1999 experienced a reduction in their tax rate with a median decline of 5 percentage points.
FORBES: A Cross Country Comparison Of Corporate Income Taxes
Finally, there's the puzzle of the Romneys' extraordinarily low effective tax rate.
But there are many others who are paying an effective tax rate that is much lower, because of the nature of their income.
The top effective tax rate is under 30%, and of course, this ignores the fact that investment income is treated in an entirely different (read: more lax) way.
The average state and local effective tax rate on telecom services--some of which is paid directly by customers and some of which is levied on the companies, who then pass on the cost--is 14.17% throughout the U.S., compared to 6.12% for general businesses, according to the COST study.
Even with the tax compromise this effective tax rate will continue moving higher as a result of higher state and local taxes.
The average effective U.S. corporate tax rate the amount of tax corporations actually pay is far lower than 35 percent, roughly 20 percent to 25 percent by some estimates.
FORBES: Obama's Pandering To The Business Lobby And The Truth About Taxes
The report, from November of 2011, found that the average effective tax rate for all 280 companies in the study over the three year period was 18.5% not the 35% top tax rate often complained about.
FORBES: New York AG's Private Equity Investigation: Money Grab or Shameless Politics?
The new report also shows the impact of the Bush-era tax cuts on the effective tax rate higher-income folks pay.
应用推荐