Effective tax rate
Total tax paid divided by total income, giving the average rate across everything you earned rather than the rate charged on the last dollar of it.
Where a marginal rate describes one slice of income, an effective rate describes all of it at once. Under a progressive system the lower brackets are taxed at lower rates, so the average comes out below the top rate reached. Anyone quoting their bracket as what they pay overall is quoting a number higher than the truth.
The figure moves with whatever you divide by. On a United States return, total tax over gross income, over adjusted gross income, and over taxable income give three different answers from the same filing, and they are not interchangeable, so the denominator is worth stating whenever the number is. Used consistently, it is a summary: good for comparing one year against another, or one household against another, and for seeing what deductions and credits did in aggregate.
The mistake is pricing a decision with it. An extra dollar earned, a dollar put into a traditional retirement account, a dollar of deduction claimed: none of these are taxed or saved at the average rate, because they all land at the top of the pile and are priced at the marginal tax rate. Reaching for the effective rate instead understates what a pre-tax contribution is worth, sometimes by a wide margin.