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Effective Tax Rate History Chart
Chart any stock's effective tax rate over 10 years against the 21% US statutory baseline, with a declining / stable / rising trend verdict. Auto-populates from Yahoo Finance. Pair it with the NOPAT calculator and the ROIC calculator.
How to Read the Effective Tax Rate Trend
The effective tax rate is income tax expense divided by pre-tax income — the real fraction of profit a company hands to tax authorities after credits, deductions, and the mix of domestic and foreign earnings. It rarely equals the 21% US statutory rate, and the gap is itself informative: a persistently low rate hints at foreign earnings, credits, or aggressive planning, while a high rate points to state taxes, non-deductible items, or high-tax jurisdictions.
The dashed line at 21% is the US federal statutory rate set by the 2017 Tax Cuts and Jobs Act — a quick visual anchor for whether a company runs above or below the baseline. Bars turn green when the rate falls more than 2 percentage points year-over-year (improving after-tax returns), red when it rises more than 3 points (a tax headwind), and amber when it is roughly stable.
Because the tax rate scales net operating profit after tax, it flows straight into NOPAT and ROIC. A company that durably lowers its effective rate keeps more of every operating dollar — raising after-tax earnings power without changing the underlying business. The ROIC guide explains why tax rate matters for returns on capital, and why a one-off dip below 10% deserves a look at the 10-K footnotes before you extrapolate it.
Related Tools
Carry the tax rate into the returns-on-capital picture:
- ROIC Calculator — the tax rate scales NOPAT, the numerator of ROIC
- NOPAT Calculator — net operating profit after tax, where the rate lands
- ROIC Guide — why tax rate matters for returns on capital
- Operating Income History Chart — the pre-tax profit base
- Net Income History Chart — the after-tax bottom line over time
Frequently Asked Questions
What is the effective tax rate?
The effective tax rate is a company's income tax expense divided by its pre-tax income, expressed as a percentage. It is the actual share of profit paid in taxes after all deductions, credits, and foreign-rate differences — which is usually different from the 21% US federal statutory rate.
What do the bar colors mean?
Bars are colored by the year-over-year change in the effective tax rate. Green means the rate fell more than 2 percentage points — tax efficiency is improving, which lifts after-tax returns. Red means the rate rose more than 3 percentage points — a tax headwind on earnings. Amber means the rate was roughly stable, or there is no prior year to compare.
What is the 21% reference line?
The dashed line at 21% marks the US federal corporate statutory rate set by the 2017 Tax Cuts and Jobs Act. A company well below 21% is benefiting from credits, foreign income taxed at lower rates, or one-time items. A company above 21% typically faces state taxes, non-deductible expenses, or significant foreign operations in higher-tax jurisdictions.
Why does the effective tax rate matter for ROIC?
Return on invested capital is built on net operating profit after tax (NOPAT), so the tax rate directly scales the numerator. A company that can sustainably lower its effective tax rate keeps more of every dollar of operating profit, which raises ROIC and after-tax earnings power without any change to the underlying business.
Why might a tax rate be unusually low one year?
A single-year effective tax rate below 10% often reflects a one-time benefit — a deferred tax asset release, a large credit, a settlement, or a loss carryforward — rather than a durable advantage. The chart flags unusually low rates so you can check the 10-K footnotes before assuming the low rate repeats.
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