Much debate has centered around income inequality in the U.S. and the amount of wealth owned by the top 1%. According to statistics from the Federal Reserve, as of the fourth quarter of 2021, the top 1% of households amassed $45.9 trillion in wealth. The bottom 50% held about $3.7 trillion. (These are America’s cities with the widest income gaps.)
But how much earnings actually put someone in the top 1%? SmartAsset estimates that a family would need an income of $597,815 to classify in the top 1% of earners nationwide. That is 2.48 times greater than the $240,712 required to break into the top 5%. SmartAsset drew the stats from IRS and the Bureau of Labor Statistics data.
Nationwide figures fail to highlight the differences between states. The income a person needs to be in the top 1% in one state could be significantly higher than in another state.
To identify how much you need to make to be in the 1% in every state, 24/7 Wall St. ranked states by the income floors of the 1%, using the adjusted gross income by percentile from the IRS Statistics of Income – Tax Stats for 2019, the most recent data available. All other data also came from the IRS except for poverty rates, which came from the American Community Survey 2020 and are five-year estimates.
To see the wide disparity between states, look at West Virginia versus Connecticut. To be considered in the 1% in West Virginia you would need an average income of $664,181, or at least $319,925, both the lowest of all states. The next state is also Southern. In Mississippi, where the average income of the top one-percenters is $741,206 or at least $327,111.
Meanwhile, in Connecticut, the top one-percenters earn an average income of $2.68 million, or at least $815,592, both tops among all states. In general, people living in coastal states need the highest incomes to qualify for 1% status. Following Connecticut, Massachusetts, New Jersey, New York, and California round out the top five. (These are states with the highest per capita income.)
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