While income inequality is a fundamental component of the U.S. capitalist economy, a recent poll conducted by the Pew Research Center found that 61% of Americans think that it has gone too far. Today, the top 1% of earners in the United States account for about 20% of the country’s total income annually. Meanwhile, the lowest-earning quarter of Americans account for just 3.7% of income every year.
Nationwide, it takes an annual income of $538,926 to be among the top 1%. Among the approximately 1.4 million taxpayers who meet this threshold, the average annual income is about $1.7 million — about 20 times the average income of $82,535 among all taxpayers. Wealth, however, is far more concentrated in certain parts of the country than in others, and as a result, the amount it takes to be among the top 1% in each state varies considerably.
Using adjusted gross income percentile data for the 2017 tax year from the IRS, 24/7 Wall St. determined how much you need to make to be in the 1% in every state. All data is derived from federal 1040 individual tax returns and is inflation adjusted for 2019. The annual income floor needed to be in the 1% ranges from less than $350,000 in some states to well more than double that in others.
Across populations, incomes tend to rise with educational attainment. As a result, incomes tend to be higher in states that are home to a large share of college educated adults. Indeed, many of the best-educated states are also those with the highest income threshold to be among the top 1% of earners. Here is a complete list of America’s most and least educated states.
Of course, just as incomes vary nationwide, incomes also vary within states. The income necessary to be among the top 1% in each state is often driven up by a handful of wealthy towns or neighborhoods. Concentrated pockets of wealth drive up average overall incomes in every state. Here is a look at the richest town in every state.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.