Mitt Romney's father, George Romney, paid an effective tax rate of nearly 37% in 1967.
The answer is that decisions are not made at the effective tax rate.
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Additionally, the effective tax rate in many countries can be significantly lower than the nominal rate.
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But the U.S. effective tax rate is not light years away from Western Europe, Canada, or Australia.
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Your income from quarterly dividends would be taxed according to your effective tax rate, maxing out at 39.6%.
The result: the more of your income from gains and dividends, the lower your effective tax rate (ETR).
In the second quarter, the company said its "effective tax rate" was 10.5%, down from 19% in 2009.
And the effective tax rate on this group is much higher, not lower, than any other income category.
The government has steadily dished out waivers to favoured industries: tourism pays an effective tax rate of 5%.
The year-over-year improvement was led by higher sales, lower associate incentive expense and a lower effective tax rate.
The truth is, though, that the proposed bill excludes countries with an effective tax rate of greater than 7%.
The only exception is the lowest-earners, whose effective tax rate is nearly zero, thanks to the earned income credit.
They ignore the fact that there is a difference between your marginal tax rate and your effective tax rate.
Excluding share-based compensation expense and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 41%.
However, most tools will use the marginal rate of your highest tax bracket rather than your effective tax rate.
The increase in earnings was due to top line growth and a lower effective tax rate, the company said.
If Helman made that comparison for ExxonMobil, he would have gotten an effective tax rate of roughly 13 percent.
The new report also shows the impact of the Bush-era tax cuts on the effective tax rate higher-income folks pay.
If you are in the 25 percent tax bracket, your effective tax rate would be 62.5 percent (2.5 times 25 percent)!
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For example, China provides tax holidays or rulings reducing the effective tax rate on certain corporate income to 15% or 20%.
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Even with the tax compromise this effective tax rate will continue moving higher as a result of higher state and local taxes.
If that happens, the top effective tax rate will be 62 percent.
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My first reaction is that Phil should talk to his accountant because his effective tax rate is surely lower than 60 percent.
Finally, there's the puzzle of the Romneys' extraordinarily low effective tax rate.
And if you tack on their shares of the corporate income tax and the estate tax, their effective tax rate hit 24.5 percent.
Raising your personal income tax rate on dividend and capital gain income to 30 percent increases your effective tax rate to 45.3 percent.
But there are many others who are paying an effective tax rate that is much lower, because of the nature of their income.
And that would apply to somebody paying 15 percent -- an effective tax rate of 15 percent on millions of dollars of income.
The assumption is that Med devices effective tax rate is approx 20%, if it were raised to 35%, it would nearly double the tax.
So even though the rate is high, companies can enjoy a low effective tax rate by using various credits, deductions, exemptions, and other preferences.
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