If I understand it correctly, the effective capital gain tax rate takes into account that some parts of the portfolio have already been taxed. Therefore the amount of taxes paid are some kind of tax shield, that would have otherwise been subject to the tax when realizing capital gains. Stated in another way: The basis for the tax when realizing capital gains will be smaller if there have aleady been paid taxes earlier on investment income etc.
So what does it really mean? The effective capital gain tax rate is a way of calculating the effect of deferring taxation. Therefore taxes on realized gains have to be eliminated for this calculation. If you have a lot of dividends or interest payments in your portfolio, a large part of annual taxes are due and less money will be taxed at the end of the investment horizon. So the effective capital gain tax rate should be lower.