If the state tax rate is 20% and the federal tax rate is 30%, what is the total effective tax rate?

Question

Quizplus · Accepted Answer

To calculate the total effective tax rate, we need to apply the formula: 
Total effective tax rate = (1 - state tax rate) x (1 - federal tax rate)
Plugging in the given values, we get: 
Total effective tax rate = (1 - 0.20) x (1 - 0.30) = 0.8 x 0.7 = 0.56
Converting this to a percentage, we get: 0.56 x 100% = 56%
Therefore, the correct answer is C) 44%, as this is the closest option to the calculated value.

If the State Tax Rate Is 20% and the Federal