After-tax real rate of return

After-tax real rate of return

The after-tax rate of return minus the inflation rate.

After-Tax Real Rate of Return

The rate of return on an investment after subtracting taxes and adjusting for inflation. It is calculated simply by taking the after-tax return and subtracting the inflation rate. For example, if the after-tax return is 7% and the inflation rate is 4%, the after-tax real rate of return is 3%.
References in periodicals archive ?
5%-3% per year, the retiree should be able to earn a positive after-tax real rate of return.
According to Feldstein, most of the cost of inflation grows out of the fact that it increases the effective tax rate on capital income and consequently reduces the after-tax real rate of return facing savers.
2) For this reason, in Abel's general equilibrium adaptation of Feldstein's analysis, an increase in the inflation rate produces an increase in the before-tax real rate of return on capital that is roughly equal to the decrease in the after-tax real rate of return predicted by Feldstein.
In our model, by contrast, an increase in the inflation rate causes a decrease in both the after-tax real rate of return to capital and the before-tax real rate of return to capital, and it also widens the spread between these two rates.
i], so the gross after-tax real rate of return on deposits is [R.