May 17, 2024

Introduction:

A recent study by financial information provider SmartAsset has unveiled crucial insights into the income thresholds required to enter the esteemed group of the top 1% of wealthiest households in the United States. State-by-state variations are evident, with Connecticut claiming the highest threshold and Massachusetts following closely, both demanding over $900,000 annually before taxes for inclusion in the ultra-wealthy list. This article will comprehensively explore the study’s key findings, state rankings, and the factors influencing these income thresholds.

  1. Income Threshold Rankings: SmartAsset’s study has meticulously ranked states based on the income threshold necessary to secure a spot among the exclusive top 1% of affluent households. Leading the list is Connecticut, where households must command an annual income of approximately $953,000 before taxes. Massachusetts closely trails behind, with a significant income threshold of $903,401. Other states among the top ranks include California, New Jersey, and Washington, with income requirements of $844,266, $817,346, and $804,853, respectively.
  2. New York’s Unique Scenario: Notably, New York presents a distinct scenario compared to its counterparts. The income threshold to enter the top 1% remains stagnant at approximately $776,662, making it relatively more accessible for high-earning households. According to Jaclyn DeJohn, SmartAsset’s managing editor of economic analysis, “It’s easier to get into the 1% in New York than it ever has been.”

Income Thresholds and Top 1% Tax Rates by State

RankStateIncome Threshold for Top 1%Top 1% Tax Rate
1Connecticut$952,90228.4%
2Massachusetts$903,40127.1%
3California$844,26626.9%
4New Jersey$817,34628.0%
5Washington$804,85326.0%
6New York$776,66228.3%
7Colorado$709,09225.9%
8Florida$694,98725.8%
9Illinois$660,81026.4%
10New Hampshire$659,03726.3%

Note:

The income thresholds are based on 2020 IRS data adjusted to May 2023 dollars, and the top 1% tax rates represent the percentage of taxes paid by the top 1% of earners in each state.

Conclusion:

The comprehensive study conducted by SmartAsset offers valuable insights into the income thresholds required to join the top 1% of the wealthiest households in the US. With Connecticut and Massachusetts leading the pack, and New York presenting an intriguing scenario, the financial landscape for the ultra-wealthy varies significantly across states. Understanding the factors influencing these thresholds is essential in comprehending the dynamics of wealth distribution in the country.

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