Journey to the 1%: How State Variances Impact Elite Income Levels in the USA


Aspiring to be part of the top 1% of earners in the United States may seem out of reach for most, but new data reveals that the path to this elite income level varies across states.
Nationally, the threshold for becoming part of the 1% is an annual income of $652,657. Comparatively, the median U.S. household income is approximately $75,000 per year.

The top 1% may be a select group, but they command a disproportionate 21% share of the nation’s household income, as the left-leaning Economic Policy Institute indicates. This disparity has significantly increased since the 1970s, with rapid income growth among the highest earners and slower progress for middle-class workers, according to data from the Pew Research Center.

Connecticut leads the pack with the highest income requirement for 1% entry, demanding at least $952,902 annually. Neighboring Massachusetts follows closely with a base of $903,401, while California’s threshold is $844,266.

However, high earners in these states also face some of the steepest effective tax rates. In Connecticut, the typical 1% earner pays an effective rate of 28.4%, the nation’s highest.
In contrast, joining the 1% is more attainable in the South and Appalachia regions. Six of the ten states with the lowest 1% income thresholds are located here, with West Virginia offering the most accessible entry at $367,582—the lowest in the country.

Additionally, many Southern states enjoy the lowest tax rates. For instance, 1% of earners in Arkansas face an effective tax rate of 21%, the nation’s lowest.
Interestingly, the highest threshold for entering the 1% is not found in a state but in Washington, D.C., where the highest earners take home well over $1 million annually.

As the pursuit of wealth and income equality continues to be a topic of interest, these state variances highlight the need for a nuanced approach to economic policies and opportunities for growth.

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