Effective Tax Rate vs Average Tax Rate

The average tax rate is calculated by dividing the total tax by taxable income:
average tax rate = total tax / taxable income
The effective tax rate, on the other hand, is calculated by dividing the total tax by TOTAL income, with total income including both taxable and nontaxable income:
effective tax rate = total tax / total income
The effective tax rate will be lower than the average tax rate when the taxpayer has tax-exempt income (include that isn't subject to tax).
A third type of tax rate is the marginal tax rate, which is the rate that would be incurred on the next dollar of taxable income.
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[@Sushil_by_name_only.]

Your videos have been incredibly helpful for my studies. Thank you professor 🙏

[@Edspira]

You are very welcome my friend!