What is the difference between a tax rate and an effective tax rate?

A tax rate is the percentage of taxes that an individual or organization pays on an assessed value of a certain property. For example, a person paying a tax rate of 5% on a property worth $100,000 would pay $5,000 in taxes. An effective tax rate is the amount of taxes paid as a percentage of the total value of the property. In the example above, the effective tax rate would be 5% of the total value of the property, or $5,000 divided by the value of the property ($100,000). The effective tax rate provides a more accurate representation of the actual taxes paid on a particular property. In California, property taxes are based on the assessed value of the property and levied according to a uniform rate set by the state. The rate is adjusted annually, and different county and local government agencies can set their own rates. The effective tax rate is the amount of taxes gathered from the assessed value of the property. This can vary depending on where the property is located, and different tax rates for different properties can create an unequal effective tax rate throughout the state.

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