The effective tax rate is the equivalent percent rate of the tax paid out of the dollar amount the tax is based on. A gasoline tax is a flat tax when considered in terms of consumption, a tax of, say,...The effective tax rate is the equivalent percent rate of the tax paid out of the dollar amount the tax is based on. A gasoline tax is a flat tax when considered in terms of consumption, a tax of, say, $0.30 per gallon is proportional to the amount of gasoline purchased. While sales tax is a flat percentage rate, it is often considered a regressive tax for the same reasons as the gasoline tax.
