There are many ways to describe America. Some might call it a veritable patchwork of diverse cultures and social strata. That’s a fancy way of saying that prosperity is concentrated in some U.S. states more than in others.
As a result, a handful of America’s 50 states have more millionaires than others. By the process of elimination, we can pinpoint one U.S. state with the most millionaires per capital, or what we might call “millionaire density.”
This is a fascinating topic because it raises certain questions: Where do the most millionaires live in America? What features of that state would make it so attractive to millionaires? Could it be a good state to live in if your household has built up a sizable nest egg?
You may have a particular state in mind as the seemingly obvious pick for most millionaire-dense state. However, the correct answer to this not-so-trivial question will probably surprise you. So, get ready as we wade into the wealth and uncover America’s richest state (by one specific metric, at least).
Lush Wealth in the Garden State
If you guessed that the American state with the most millionaires per capita is California, New York, or perhaps Connecticut, your logic is well founded. Yet, I must report that your answer would be incorrect.
The correct response would actually be New Jersey. According to the most recent credible source available, New Jersey had roughly 246,000 households with a net worth of at least $1 million.
As a result, 9.76% of New Jersey’s households were counted as having a net worth equal to or greater than $1 million. We can’t call New Jersey a landslide winner, though, since Maryland was a very close second-place finisher with 9.72% while Connecticut came in third with 9.44%.
Still, New Jersey deserves its due attention for beating 49 states, some of which are assumed to have high concentrations of wealth. This makes the state an ideal place to retire when you’ve saved up seven figures — right?
Maybe, or maybe not. New Jersey has its prime features and it’s a beautiful state, no doubt, but being millionaire-dense doesn’t necessarily mean the Garden State is always millionaire-friendly.
Geography Attracts Prosperity
House buyers often understand that what makes a prime piece of real estate is location, location, location. In New Jersey, the state’s advantageous location isn’t just a feature; it’s a millionaire magnet.
As it turns out, New Jersey is home to Fortune 500 companies such as Johnson & Johnson (NYSE:JNJ), Merck (NYSE:MRK), and Bristol Myers Squibb (NYSE:BMY). Thus, if you’re a bigwig in the pharmaceutical/healthcare space, living in New Jersey would make practical sense.
Furthermore, New Jersey is situated in close proximity to New York and, more specifically, to New York City. While New Jersey has can be busy, it generally doesn’t expose commuters to the level of hustle and bustle they’d experience in New York City.
Don’t get me wrong. New York City’s lively milieu gives it a certain character that you won’t find anywhere else in the world. That said, a millionaire seeking a quieter upscale lifestyle might not prefer exposure to the Big Apple’s sometimes chaotic core.
In other words, New Jersey is close enough yet also sufficiently far away from New York City. Besides, millionaires may find New Jersey to have some attractive big-city elements while also allowing enough room to raise a family.
A Taxing Financial Issue
While it may be factually correct to identify New Jersey as the American state with the most millionaires per capita, this could change in the near future. That’s because New Jersey’s tax code may induce some millionaires to leave the state.
Since 2020, a New Jersey resident with an annual taxable income exceeding $1 million is subject to what’s informally known as a “millionaire’s tax.” More precisely, these individuals may have to pay a New Jersey state income tax amounting to 10.75% of their taxable earnings.
On top of that, there’s a New Jersey “mansion tax” that could assess substantial fees on sales of properties exceeding $1 million in value. This directly affects home sellers rather than buyers, but it may inhibit big-ticket home transactions within the state.
The takeaway is that millionaires aren’t necessarily choosing New Jersey because it’s wealth-friendly, and at some point, some millionaires might not choose the state at all. Nevertheless, New Jersey’s appeal as an economic hub with proximity to New York City remains intact and, for the time being at least, it tops the list of America’s millionaire-dense states.
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