Here's how much you need to earn annually to join the 1% in your state
The top 1% may seem like an exclusive and unattainable income level for most Americans, but joining the ranks of the nation's highest earners is at least a slightly more achievable goal in some states than others, according to a new SmartAsset report.
Nationally, it takes an annual income of $652,657 to cross the threshold into the so-called 1% level of wealth, SmartAsset calculated, based on data from the IRS and Bureau of Labor Statistics. By comparison, the median U.S. household brings home about $75,000 annually.
But that 1% threshold varies from state to state, ranging from as high as $953,000 to as low as $368,000, the analysis found.
The top 1% of income earners may be small in number, but they control a greatly disproportionate 21% of the nation's household income, according to the left-leaning Economic Policy Institute. That share has roughly doubled since the 1970s, thanks to rapid income growth among America's top earners and tepid income growth among middle-class workers, data from the Pew Research Center shows.
The state with the highest threshold for entering the 1% is Connecticut, where one would need to earn at least $952,902 per year to become one of its top earners. Neighboring Massachusetts has the second-highest base for 1 percenters, at $903,401, followed by California with $844,266.
High earners in those states also face some of the nation's steepest effective tax rates, which is the percentage of income paid in federal income taxes, SmartAsset noted. The typical 1% earner in Connecticut pays an effective rate of 28.4%, the highest in the nation.
On the other hand, it takes the least amount of money to join the 1% in Appalachia and the South, where six of the 10 states with the lowest 1% income thresholds are located. It's easiest to enter the 1% crowd in West Virginia, where the threshold is $367,582 — the lowest in the country.
Many Southern states also have the lowest tax rates in the nation. In Arkansas, the effective tax rate for 1 percenters is 21%, the lowest of any state.
The nation's top threshold for entering the 1% isn't actually found in a state, but in Washington, D.C., where the highest earners take home well over $1 million a year.