average tax rate

average tax rate definition - finance
The amount of taxes paid as a percentage of income. The average tax rate is calculated by combining the different rates weighted to the payment amounts in order to arrive at an average tax rate. Corporations usually have an average tax rate of 35 percent to 40 percent. The rate declines if a companyÂ’s profits fall and it often rises as profits increase.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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