What does it take to be a “one percenter?” How much do you have to earn before you fall into this rarified zone?
A new study written by socioeconomists Estelle Sommeiller and Mark Price, looked at state-level tax data from the Internal Revenue Service over the past 35 years. They’ve created a chart which looks at annual income at the threshold of the top 1% in each U.S. state. If you live in Connecticut, you’re a “one percenter” if you earn more than $678,000 a year, higher than New York’s threshold of $506,000, the $539,000 threshold in New Jersey, $555,000 in Washington, D.C. or $532,000 in Massachusetts. California ($438,000) and Texas ($423,000), which are considered wealthy states, actually came in behind North Dakota ($502,000).
States with the lowest threshold include West Virginia ($243,000), Kentucky and Alabama ($263,000) and Maine ($274,000). If somebody earning a good income in Connecticut or New York wanted to break into the one-percent category, he/she could move to a less competitive state.
Nationwide, the total share of income going to the upper 1% rose by about 12 percentage points since 1979. The one-percenters in Connecticut make a little over 33% of all income in that state, and in New York, the percentage is 32.6%. Elsewhere, the range is generally in the 14% to 22% range, up from the 7-11% range back in 1979.
About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years. Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.
Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association.