Wondering how "the other half lives" is so outdated, especially when we we can easily peek into what life is like for the "one percent." A new report from SmartAsset reveals how much money you'll need to be considered the top one percent in Texas.
With Southlake now the richest city in Texas in one study and Frisco named the third wealthiest in America in another report, it's obvious that the North Texas landscape is dotted with pockets of wealth. But how much do you actually need in your pocket to have a top one percent income?
In Texas, an annual income of $641,400 will land you at the top, while $258,400 only gets you to the top five percent.
To come up with those numbers, SmartAsset analyzed 2019 data from IRS tax units and adjusted the figures to 2022 dollars using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the Bureau of Labor Statistics.
For comparison, "the average American household earns a median income of under $70,000," according to the study. And per the latest figures from the U. S. Census Bureau, the median household income in Texas (in 2021 dollars) is $67,321. That leaves plenty of us with a long way to go in our financial striving.
So now we know how we compare to our neighbors, but where does that put the affluent population of Texas in comparison with other states?
For starters, Texas claimed the 10th highest income required to reach top income levels.
The one percent income threshold is hardest to meet in Connecticut ($955,000), Massachusetts ($900,000), New Jersey ($825,965), New York ($817,796), and California ($805,519). Only these five states have thresholds that exceed $800,00, and it's a pretty steep drop down to Texas ($641,400) in 10th place.
The five states where it's easiest to attain one percent status (even though that doesn't seem like good news) are Kentucky ($447,300), Arkansas ($446,276), New Mexico ($418,970), Mississippi ($383,128), and West Virginia ($374,712).
The SmartAsset report also included average tax rates for top earners in each state. There was surprisingly little variance in the top 10 states, with Washington state having the lowest rate (25.02%) and Connecticut collecting the highest tax rate (27.77%).
Texas was in the middle of the pack with a tax rate of 25.71% levied on top one percent incomes.
The 10 states with the highest earnings required to be a one-percenter and their tax rates are:
- Connecticut ($955.3K, Tax rate 27.77%)
- Massachusetts ($896.9K, Tax rate 26.4%)
- New Jersey ($826K, Tax rate 27.36%)
- New York ($817.8K, Tax rate 27.48%)
- California ($805.5K, Tax rate 26.78%)
- Washington ($736.1K, Tax rate 25.02%)
- Colorado ($682.9K, Tax rate 25.24%)
- Florida ($678.8K, Tax rate 25.23%)
- Illinois ($666.2K, Tax rate 26.23%)
- Texas ($641.4K, Tax rate 25.71%)
If you're on your way to being a top earner and want to do a deeper dive on those numbers, you can view the full report on the SmartAsset website.
As an enthusiast well-versed in financial demographics and economic indicators, I can confidently dissect the information provided in the article about the income thresholds for the top one percent in Texas and other states. The data comes from SmartAsset, which is known for its rigorous analysis of financial trends and statistics. To establish the income thresholds, SmartAsset utilized 2019 data from IRS tax units, adjusting the figures to 2022 dollars using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the Bureau of Labor Statistics. This methodology ensures a reliable and up-to-date representation of income levels.
In Texas, achieving top one percent status requires an annual income of $641,400, while reaching the top five percent corresponds to an income of $258,400. These figures give a clear perspective on the wealth distribution in the state, especially when compared to the average American household's median income of under $70,000.
The article also delves into the national landscape, highlighting the income thresholds for the top one percent in various states. Notably, Texas ranks 10th in terms of the income required to reach the top one percent, with Connecticut, Massachusetts, New Jersey, New York, and California occupying the top spots. Connecticut leads the list with an income threshold of $955,000. On the other end, states like Kentucky, Arkansas, New Mexico, Mississippi, and West Virginia have the lowest thresholds for achieving one percent status.
Additionally, the report provides insights into the average tax rates for top earners in each state. Despite variations, the top 10 states exhibit relatively close tax rates, with Washington having the lowest at 25.02% and Connecticut the highest at 27.77%. Texas falls in the middle of the spectrum with a tax rate of 25.71%.
In summary, the SmartAsset report not only offers a snapshot of the financial landscape in Texas but also provides a broader perspective on income disparities and tax rates across the United States. The methodology used, coupled with the comprehensive analysis of state-wise data, solidifies the credibility of the findings presented in the article. For individuals aspiring to be top earners, the full report on the SmartAsset website can serve as a valuable resource for a deeper understanding of these financial dynamics.
