Scott Fitzgerald famously said the rich are different from you and me. Regardless of the traits or behavior of the wealthy, the richest 1% still have to pay taxes. That makes them the same as you and me, though they may not be paying their taxes at the same rate that the rest of us do. For the affluent, some states are more tax accommodating than others. (Here are some of the most common tax mistakes people make.)
To determine the most tax-friendly states for the rich, 24/7 Wall St. reviewed data on tax returns by income percentile from the Internal Revenue Service Statistics of Income Division. States were ranked based on the average income tax payment for the top 1% of earners as a percentage of the average reported income by the top 1% of earners in fiscal 2019. All other data also came from the IRS SOI.
The five states with the lowest effective tax rate for the top 1% of earners are Vermont, Idaho, New Mexico, Arkansas, and Mississippi at 23% or less. In those states, the percentage of income held by the top 1% of earners is 17.4% or less.
In six states, the average income tax bill for the top 1% of earners exceeds $500,000, and in two of them — New York and Massachusetts — it is more than $600,000. Those states are two of the 41 states where the average income of the top 1% of earners is more than $1 million and two of the six states where the average income of the top 1% is more than $2 million.
The worst five states for the rich are coastal states: Connecticut, New York, New Jersey, California, and Massachusetts. All have an effective tax rate for the top 1% earners of 26.5% or above. In four of those five states, the percentage of income held by the top 1% of earners is 20% or more. (Here are countries where taxes most effectively close the income gap.)
Click here to see the most tax friendly states for the rich
50. Connecticut
> Effective tax rate for top 1% of earners: 27.8%
> Avg. income for top 1% of earners: $2.7 million (the highest)
> Avg. income tax bill for top 1% of earners: $744,602.35 (the highest)
> Pct. of income held by top 1% of earners: 24.4% (4th highest)
> Pct. of taxes paid by top 1% of earners: 42.6% (5th highest)
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49. New York
> Effective tax rate for top 1% of earners: 27.5%
> Avg. income for top 1% of earners: $2.5 million (3rd highest)
> Avg. income tax bill for top 1% of earners: $681,837.62 (2nd highest)
> Pct. of income held by top 1% of earners: 25.8% (3rd highest)
> Pct. of taxes paid by top 1% of earners: 45.6% (4th highest)
48. New Jersey
> Effective tax rate for top 1% of earners: 27.4%
> Avg. income for top 1% of earners: $1.8 million (8th highest)
> Avg. income tax bill for top 1% of earners: $503,622.90 (7th highest)
> Pct. of income held by top 1% of earners: 18.1% (14th highest)
> Pct. of taxes paid by top 1% of earners: 33.6% (21st lowest)
47. California
> Effective tax rate for top 1% of earners: 26.8%
> Avg. income for top 1% of earners: $2.1 million (6th highest)
> Avg. income tax bill for top 1% of earners: $552,816.44 (5th highest)
> Pct. of income held by top 1% of earners: 21.4% (7th highest)
> Pct. of taxes paid by top 1% of earners: 39.3% (9th highest)
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46. Massachusetts
> Effective tax rate for top 1% of earners: 26.5%
> Avg. income for top 1% of earners: $2.5 million (4th highest)
> Avg. income tax bill for top 1% of earners: $654,194.23 (3rd highest)
> Pct. of income held by top 1% of earners: 22.3% (6th highest)
> Pct. of taxes paid by top 1% of earners: 38.1% (10th highest)
45. Illinois
> Effective tax rate for top 1% of earners: 26.2%
> Avg. income for top 1% of earners: $1.6 million (13th highest)
> Avg. income tax bill for top 1% of earners: $417,019.78 (11th highest)
> Pct. of income held by top 1% of earners: 18.4% (12th highest)
> Pct. of taxes paid by top 1% of earners: 36.3% (15th highest)
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44. Virginia
> Effective tax rate for top 1% of earners: 25.8%
> Avg. income for top 1% of earners: $1.4 million (15th highest)
> Avg. income tax bill for top 1% of earners: $373,184.74 (15th highest)
> Pct. of income held by top 1% of earners: 16.1% (23rd lowest)
> Pct. of taxes paid by top 1% of earners: 31.7% (10th lowest)
43. New Hampshire
> Effective tax rate for top 1% of earners: 25.7%
> Avg. income for top 1% of earners: $1.5 million (14th highest)
> Avg. income tax bill for top 1% of earners: $387,362.52 (13th highest)
> Pct. of income held by top 1% of earners: 16.4% (22nd highest)
> Pct. of taxes paid by top 1% of earners: 32.2% (14th lowest)
42. Texas
> Effective tax rate for top 1% of earners: 25.7%
> Avg. income for top 1% of earners: $1.7 million (10th highest)
> Avg. income tax bill for top 1% of earners: $434,164.33 (10th highest)
> Pct. of income held by top 1% of earners: 20.9% (8th highest)
> Pct. of taxes paid by top 1% of earners: 41.1% (6th highest)
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41. Maryland
> Effective tax rate for top 1% of earners: 25.7%
> Avg. income for top 1% of earners: $1.4 million (16th highest)
> Avg. income tax bill for top 1% of earners: $366,915.27 (16th highest)
> Pct. of income held by top 1% of earners: 15.9% (19th lowest)
> Pct. of taxes paid by top 1% of earners: 31.0% (8th lowest)
40. Pennsylvania
> Effective tax rate for top 1% of earners: 25.6%
> Avg. income for top 1% of earners: $1.3 million (21st highest)
> Avg. income tax bill for top 1% of earners: $336,071.48 (18th highest)
> Pct. of income held by top 1% of earners: 16.5% (20th highest)
> Pct. of taxes paid by top 1% of earners: 33.9% (24th lowest)
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39. Minnesota
> Effective tax rate for top 1% of earners: 25.4%
> Avg. income for top 1% of earners: $1.3 million (18th highest)
> Avg. income tax bill for top 1% of earners: $341,963.87 (17th highest)
> Pct. of income held by top 1% of earners: 15.6% (17th lowest)
> Pct. of taxes paid by top 1% of earners: 32.2% (13th lowest)
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38. Colorado
> Effective tax rate for top 1% of earners: 25.2%
> Avg. income for top 1% of earners: $1.6 million (11th highest)
> Avg. income tax bill for top 1% of earners: $410,995.41 (12th highest)
> Pct. of income held by top 1% of earners: 17.9% (15th highest)
> Pct. of taxes paid by top 1% of earners: 34.4% (25th highest)
37. Florida
> Effective tax rate for top 1% of earners: 25.2%
> Avg. income for top 1% of earners: $2.2 million (5th highest)
> Avg. income tax bill for top 1% of earners: $549,988.77 (6th highest)
> Pct. of income held by top 1% of earners: 26.7% (2nd highest)
> Pct. of taxes paid by top 1% of earners: 48.9% (the highest)
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36. Washington
> Effective tax rate for top 1% of earners: 25.0%
> Avg. income for top 1% of earners: $1.9 million (7th highest)
> Avg. income tax bill for top 1% of earners: $470,301.79 (8th highest)
> Pct. of income held by top 1% of earners: 19.0% (10th highest)
> Pct. of taxes paid by top 1% of earners: 34.3% (25th lowest)
35. Tennessee
> Effective tax rate for top 1% of earners: 24.9%
> Avg. income for top 1% of earners: $1.3 million (20th highest)
> Avg. income tax bill for top 1% of earners: $328,980.11 (19th highest)
> Pct. of income held by top 1% of earners: 18.6% (11th highest)
> Pct. of taxes paid by top 1% of earners: 39.4% (8th highest)
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34. Alaska
> Effective tax rate for top 1% of earners: 24.9%
> Avg. income for top 1% of earners: $997,323 (9th lowest)
> Avg. income tax bill for top 1% of earners: $248,403.74 (11th lowest)
> Pct. of income held by top 1% of earners: 12.4% (2nd lowest)
> Pct. of taxes paid by top 1% of earners: 25.9% (the lowest)
33. Wisconsin
> Effective tax rate for top 1% of earners: 24.9%
> Avg. income for top 1% of earners: $1.2 million (25th lowest)
> Avg. income tax bill for top 1% of earners: $305,609.87 (25th highest)
> Pct. of income held by top 1% of earners: 16.1% (23rd lowest)
> Pct. of taxes paid by top 1% of earners: 34.7% (22nd highest)
32. Michigan
> Effective tax rate for top 1% of earners: 24.8%
> Avg. income for top 1% of earners: $1.1 million (19th lowest)
> Avg. income tax bill for top 1% of earners: $283,553.83 (22nd lowest)
> Pct. of income held by top 1% of earners: 15.8% (18th lowest)
> Pct. of taxes paid by top 1% of earners: 33.9% (23rd lowest)
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31. North Carolina
> Effective tax rate for top 1% of earners: 24.8%
> Avg. income for top 1% of earners: $1.2 million (22nd lowest)
> Avg. income tax bill for top 1% of earners: $291,126.60 (23rd lowest)
> Pct. of income held by top 1% of earners: 16.1% (24th lowest)
> Pct. of taxes paid by top 1% of earners: 34.4% (24th highest)
30. Ohio
> Effective tax rate for top 1% of earners: 24.7%
> Avg. income for top 1% of earners: $1.1 million (13th lowest)
> Avg. income tax bill for top 1% of earners: $261,122.29 (15th lowest)
> Pct. of income held by top 1% of earners: 15.1% (11th lowest)
> Pct. of taxes paid by top 1% of earners: 33.0% (19th lowest)
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29. Rhode Island
> Effective tax rate for top 1% of earners: 24.7%
> Avg. income for top 1% of earners: $1.3 million (24th highest)
> Avg. income tax bill for top 1% of earners: $310,019.30 (24th highest)
> Pct. of income held by top 1% of earners: 16.1% (23rd lowest)
> Pct. of taxes paid by top 1% of earners: 32.4% (15th lowest)
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28. Louisiana
> Effective tax rate for top 1% of earners: 24.7%
> Avg. income for top 1% of earners: $1.0 million (12th lowest)
> Avg. income tax bill for top 1% of earners: $258,919.87 (13th lowest)
> Pct. of income held by top 1% of earners: 15.9% (20th lowest)
> Pct. of taxes paid by top 1% of earners: 35.4% (19th highest)
27. Oregon
> Effective tax rate for top 1% of earners: 24.5%
> Avg. income for top 1% of earners: $1.1 million (15th lowest)
> Avg. income tax bill for top 1% of earners: $272,746.64 (18th lowest)
> Pct. of income held by top 1% of earners: 14.4% (10th lowest)
> Pct. of taxes paid by top 1% of earners: 30.3% (7th lowest)
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26. Nevada
> Effective tax rate for top 1% of earners: 24.5%
> Avg. income for top 1% of earners: $1.8 million (9th highest)
> Avg. income tax bill for top 1% of earners: $451,092.32 (9th highest)
> Pct. of income held by top 1% of earners: 23.8% (5th highest)
> Pct. of taxes paid by top 1% of earners: 45.9% (3rd highest)
25. Delaware
> Effective tax rate for top 1% of earners: 24.5%
> Avg. income for top 1% of earners: $1.1 million (14th lowest)
> Avg. income tax bill for top 1% of earners: $267,450.00 (16th lowest)
> Pct. of income held by top 1% of earners: 14.1% (7th lowest)
> Pct. of taxes paid by top 1% of earners: 29.5% (5th lowest)
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24. Missouri
> Effective tax rate for top 1% of earners: 24.5%
> Avg. income for top 1% of earners: $1.2 million (24th lowest)
> Avg. income tax bill for top 1% of earners: $297,201.13 (24th lowest)
> Pct. of income held by top 1% of earners: 17.0% (19th highest)
> Pct. of taxes paid by top 1% of earners: 36.6% (14th highest)
23. Georgia
> Effective tax rate for top 1% of earners: 24.5%
> Avg. income for top 1% of earners: $1.3 million (19th highest)
> Avg. income tax bill for top 1% of earners: $327,222.32 (20th highest)
> Pct. of income held by top 1% of earners: 18.1% (13th highest)
> Pct. of taxes paid by top 1% of earners: 36.8% (13th highest)
22. South Carolina
> Effective tax rate for top 1% of earners: 24.5%
> Avg. income for top 1% of earners: $1.1 million (17th lowest)
> Avg. income tax bill for top 1% of earners: $275,646.49 (20th lowest)
> Pct. of income held by top 1% of earners: 16.3% (25th highest)
> Pct. of taxes paid by top 1% of earners: 35.7% (18th highest)
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21. Arizona
> Effective tax rate for top 1% of earners: 24.4%
> Avg. income for top 1% of earners: $1.3 million (23rd highest)
> Avg. income tax bill for top 1% of earners: $311,136.12 (23rd highest)
> Pct. of income held by top 1% of earners: 17.2% (18th highest)
> Pct. of taxes paid by top 1% of earners: 35.8% (17th highest)
20. Kansas
> Effective tax rate for top 1% of earners: 24.4%
> Avg. income for top 1% of earners: $1.2 million (25th highest)
> Avg. income tax bill for top 1% of earners: $304,109.09 (25th lowest)
> Pct. of income held by top 1% of earners: 16.4% (22nd highest)
> Pct. of taxes paid by top 1% of earners: 35.1% (21st highest)
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19. North Dakota
> Effective tax rate for top 1% of earners: 23.9%
> Avg. income for top 1% of earners: $1.3 million (17th highest)
> Avg. income tax bill for top 1% of earners: $322,461.72 (21st highest)
> Pct. of income held by top 1% of earners: 16.2% (25th lowest)
> Pct. of taxes paid by top 1% of earners: 33.0% (18th lowest)
18. Indiana
> Effective tax rate for top 1% of earners: 23.9%
> Avg. income for top 1% of earners: $972,858 (8th lowest)
> Avg. income tax bill for top 1% of earners: $232,939.58 (8th lowest)
> Pct. of income held by top 1% of earners: 14.3% (9th lowest)
> Pct. of taxes paid by top 1% of earners: 32.1% (11th lowest)
17. South Dakota
> Effective tax rate for top 1% of earners: 23.8%
> Avg. income for top 1% of earners: $1.3 million (22nd highest)
> Avg. income tax bill for top 1% of earners: $311,224.93 (22nd highest)
> Pct. of income held by top 1% of earners: 17.3% (17th highest)
> Pct. of taxes paid by top 1% of earners: 37.3% (12th highest)
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16. Kentucky
> Effective tax rate for top 1% of earners: 23.8%
> Avg. income for top 1% of earners: $918,959 (4th lowest)
> Avg. income tax bill for top 1% of earners: $218,570.47 (5th lowest)
> Pct. of income held by top 1% of earners: 14.3% (8th lowest)
> Pct. of taxes paid by top 1% of earners: 32.9% (17th lowest)
15. Nebraska
> Effective tax rate for top 1% of earners: 23.7%
> Avg. income for top 1% of earners: $1.2 million (20th lowest)
> Avg. income tax bill for top 1% of earners: $276,528.38 (21st lowest)
> Pct. of income held by top 1% of earners: 15.4% (14th lowest)
> Pct. of taxes paid by top 1% of earners: 33.6% (22nd lowest)
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14. Oklahoma
> Effective tax rate for top 1% of earners: 23.6%
> Avg. income for top 1% of earners: $1.0 million (11th lowest)
> Avg. income tax bill for top 1% of earners: $247,411.50 (10th lowest)
> Pct. of income held by top 1% of earners: 15.5% (16th lowest)
> Pct. of taxes paid by top 1% of earners: 34.6% (23rd highest)
13. Iowa
> Effective tax rate for top 1% of earners: 23.6%
> Avg. income for top 1% of earners: $951,672 (7th lowest)
> Avg. income tax bill for top 1% of earners: $224,547.88 (7th lowest)
> Pct. of income held by top 1% of earners: 13.0% (4th lowest)
> Pct. of taxes paid by top 1% of earners: 29.5% (6th lowest)
12. West Virginia
> Effective tax rate for top 1% of earners: 23.6%
> Avg. income for top 1% of earners: $664,181 (the lowest)
> Avg. income tax bill for top 1% of earners: $156,497.53 (the lowest)
> Pct. of income held by top 1% of earners: 11.2% (the lowest)
> Pct. of taxes paid by top 1% of earners: 27.5% (3rd lowest)
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11. Montana
> Effective tax rate for top 1% of earners: 23.5%
> Avg. income for top 1% of earners: $1.2 million (21st lowest)
> Avg. income tax bill for top 1% of earners: $274,652.34 (19th lowest)
> Pct. of income held by top 1% of earners: 16.4% (21st highest)
> Pct. of taxes paid by top 1% of earners: 35.3% (20th highest)
10. Hawaii
> Effective tax rate for top 1% of earners: 23.4%
> Avg. income for top 1% of earners: $949,364 (6th lowest)
> Avg. income tax bill for top 1% of earners: $222,448.91 (6th lowest)
> Pct. of income held by top 1% of earners: 12.8% (3rd lowest)
> Pct. of taxes paid by top 1% of earners: 27.2% (2nd lowest)
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9. Utah
> Effective tax rate for top 1% of earners: 23.4%
> Avg. income for top 1% of earners: $1.6 million (12th highest)
> Avg. income tax bill for top 1% of earners: $380,812.38 (14th highest)
> Pct. of income held by top 1% of earners: 19.6% (9th highest)
> Pct. of taxes paid by top 1% of earners: 40.8% (7th highest)
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8. Alabama
> Effective tax rate for top 1% of earners: 23.3%
> Avg. income for top 1% of earners: $1.0 million (10th lowest)
> Avg. income tax bill for top 1% of earners: $233,362.63 (9th lowest)
> Pct. of income held by top 1% of earners: 15.2% (13th lowest)
> Pct. of taxes paid by top 1% of earners: 33.6% (20th lowest)
7. Maine
> Effective tax rate for top 1% of earners: 23.2%
> Avg. income for top 1% of earners: $916,599 (3rd lowest)
> Avg. income tax bill for top 1% of earners: $212,502.88 (3rd lowest)
> Pct. of income held by top 1% of earners: 13.3% (5th lowest)
> Pct. of taxes paid by top 1% of earners: 29.0% (4th lowest)
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6. Wyoming
> Effective tax rate for top 1% of earners: 23.0%
> Avg. income for top 1% of earners: $2.6 million (2nd highest)
> Avg. income tax bill for top 1% of earners: $590,145.13 (4th highest)
> Pct. of income held by top 1% of earners: 27.4% (the highest)
> Pct. of taxes paid by top 1% of earners: 48.4% (2nd highest)
5. Vermont
> Effective tax rate for top 1% of earners: 22.9%
> Avg. income for top 1% of earners: $1.1 million (18th lowest)
> Avg. income tax bill for top 1% of earners: $261,024.61 (14th lowest)
> Pct. of income held by top 1% of earners: 15.4% (15th lowest)
> Pct. of taxes paid by top 1% of earners: 31.7% (10th lowest)
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4. Idaho
> Effective tax rate for top 1% of earners: 22.9%
> Avg. income for top 1% of earners: $1.2 million (23rd lowest)
> Avg. income tax bill for top 1% of earners: $269,058.30 (17th lowest)
> Pct. of income held by top 1% of earners: 16.3% (24th highest)
> Pct. of taxes paid by top 1% of earners: 35.9% (16th highest)
3. New Mexico
> Effective tax rate for top 1% of earners: 22.7%
> Avg. income for top 1% of earners: $947,082 (5th lowest)
> Avg. income tax bill for top 1% of earners: $214,688.60 (4th lowest)
> Pct. of income held by top 1% of earners: 15.1% (12th lowest)
> Pct. of taxes paid by top 1% of earners: 32.7% (16th lowest)
2. Arkansas
> Effective tax rate for top 1% of earners: 22.6%
> Avg. income for top 1% of earners: $1.1 million (16th lowest)
> Avg. income tax bill for top 1% of earners: $252,742.92 (12th lowest)
> Pct. of income held by top 1% of earners: 17.4% (16th highest)
> Pct. of taxes paid by top 1% of earners: 37.9% (11th highest)
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1. Mississippi
> Effective tax rate for top 1% of earners: 22.5%
> Avg. income for top 1% of earners: $741,207 (2nd lowest)
> Avg. income tax bill for top 1% of earners: $166,563.89 (2nd lowest)
> Pct. of income held by top 1% of earners: 13.3% (6th lowest)
> Pct. of taxes paid by top 1% of earners: 32.2% (13th lowest)
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