The effective tax rate is lower than the statutory rate when Clerc corp has a permanent difference of $100,000 for interest on municipal bonds.
A person or business's effective tax rate is the proportion of their income that goes toward paying taxes. Individuals' effective tax rate is the sum of the rates at which they are taxed on both their earned and unearned income. Comparatively, the statutory tax rate is the legally mandated percentage, while the effective tax rate is the average rate at which a company's pre-tax profits are taxed. The term "effective tax rate" refers to the amount of an individual's taxable income that is actually subject to taxation. The effective corporate tax rate is the rate at which a company actually pays taxes on its pre-tax profits. It is possible to calculate an effective tax rate that reflects an individual's or a business's overall tax liability even if the term "effective tax rate" is most commonly used to refer only to federal income tax.
To know more about effective tax rate refer to:
https://brainly.com/question/26660132
#SPJ4
