Definition of Tax rate:
A tax rate is the percentage at which an individual or corporation is taxed. The United States (both the federal government and many of the states) uses a progressive tax rate system, in which the percentage of tax charged increases as the amount of the person's or entity's taxable income increases. A progressive tax rate results in a higher dollar amount collected from taxpayers with greater incomes.
Tax liability stated as a percentage of the taxable income, or in terms of a unit of the tax base.
To help build and maintain the infrastructures used in a country, the government usually taxes its residents. The tax collected is used for the betterment of the nation, of society, and of all living in it. In the U.S. and many other countries around the world, a tax rate is applied to some form of money received by a taxpayer. The money could be income earned from wages or salary, investment income (dividends, interest), capital gains from investments, profits made from goods or services rendered, etc. The percentage of the taxpayer’s earnings or money is taken and remitted to the government.
How to use Tax rate in a sentence?
- Since the U.S. applies its tax rate in marginal increments, taxpayers end up being charged at an effective tax rate that is lower than that of the straight bracket rate.
- A tax rate is the percentage at which an individual or corporation is taxed.
- Some other nations charge a flat tax rate or a regressive tax rate.
- The U.S. imposes a progressive tax rate on income, meaning the greater the income, the higher the percentage of tax levied.
Meaning of Tax rate & Tax rate Definition