Although the effective tax rate
on the Irish CFC's income from the sale of product Y is less than 90% of the effective tax rate
that would apply to such income in Chile (12.
Due primarily to these benefits of deferral, Microsoft reported an effective tax rate
(provision for income taxes / income before income taxes) of only 25% for 2010.
Companies argue that by including deferred taxes in figuring out an effective tax rate
, there will be fewer swings in that rate from year to year, and shareholders get a better idea of what it pays in taxes.
Hsewhere, tax incentives are so generous, as in the case of Atlantic forestry and manufacturing, that the marginal effective tax rate
on capital is "negative," implying that businesses will over-invest in capital so long as they can write off unused deductions from profits earned on other investments.
In calculating an effective tax rate
, the CBO must make various assumptions to impute household liabilities for taxes paid indirectly.
Easily produce the tax schedules needed to support tax returns -- Since this same information is generated for calculating the effective tax rate
and deferred taxes, the tax solution should enhance the workflow by providing this information for purposes of supporting tax return filings.
However, the effective tax rate
applied to shale oil used for district heating purposes cannot be less than 50% of the relevant EU minimum rate as from 1/1/2007
However, despite the sizable drop in the effective tax rate
, average after-tax income for the lowest income quintile did not increase and overall after-tax income inequality grew during the last two decades.
From a tax-efficiency perspective, the captive's earnings, both underwriting and investment generated, should enjoy a lower effective tax rate
because most states do not tax the operating income (underwriting and investment income combined) of insurance companies.
In addition, because M&E is a permanent book/tax difference (a current-period expense a company recognizes in its financial statement calculation of net income that never allowed as a tax deduction), increasing deductible M&E expenses will lower a company's effective tax rate
, thereby increasing its net income.
One interesting question, then, is how significant this tax is in relation to the overall effective tax rate
This indispensable reference work provides detailed comparative information on marginal effective tax rates
by country by type of capital asset for 1980, 1985 and 1990, an index, a good working bibliography in the form of the separate chapter references, an introductory chapter by Jorgenson explaining the issues and findings, and a methodological appendix to that chapter by Jorgenson explaining the Jorgenson cost of capital  and marginal effective tax rate
[1; 3] concepts (the latter refining Harberger's notion of the effective tax rate
) and the King-Fullerton framework  for calculating the cost of various types of capital.