The top 1% of earners typically pay much more in taxes than many other Americans. Nationwide, this group contributes 45% of total personal income taxes collected. However, the top 1% doesn’t pay the same amount everywhere. Therefore, some states may be more dependent on this group than others for tax revenue.
With this in mind, SmartAsset examined the most recent IRS tax return data to determine exactly how much the top 1% of earners in each state pays in taxes, both nominally and relative to the rest of taxpayers.
Key Findings
- The top 1% of earners contribute over 60% of the income taxes collected from Wyoming residents. Wyoming’s top 1% paid $3.16 billion in taxes compared to a total of $5.12 billion paid by all Wyoming residents. This was the highest relative contribution by the top 1% in any state. For comparison, Alaska’s 1% contributed the lowest relative share of income taxes at 29.8%.
- Connecticut’s top 1% pays the highest effective tax rate. The top 1% in Connecticut pay 27.69% on each dollar of income, while the average Connecticut taxpayer pays a rate of 17.7%. Meanwhile, the top 1% of earners in Arkansas saw the lowest effective tax rate for that cohort at 21.41%.
- The top 1% earns more than 33% of income in four states. In Wyoming, the top 1% brings in 40.6% of all adjusted gross income (AGI), which adds up to $13.25 billion. The top 1% in Nevada (34.3%), Florida (34.0%) and New York (33.5%) also have particularly outsized earnings when compared with the local 99%.
- Nationwide, the top 1% of earners pay a 25.95% effective tax rate. This yielded a total of $993.7 billion dollars in income taxes paid by the top 1% over one year, or 45% of all individual income tax collected. The total adjusted gross income for this group over the same time was $3.8 billion.
Top 10 States With the Highest Tax Payments by the Top 1%
- California
- Total income tax paid by top 1%: $165,087,786
- Number of top 1% returns: 177,645
- Average effective tax rate on 1% earners: 27.2%
- Total income tax share paid by 1%: 45.8%
- Average effective tax rate for all taxpayers: 16.9%
- New York
- Total income tax paid by top 1%: $99,157,333
- Number of top 1% returns: 92,142
- Average effective tax rate on 1% earners: 27.3%
- Total income tax share paid by 1%: 52.8%
- Average effective tax rate for all taxpayers: 17.3%
- Florida
- Total income tax paid by top 1%: $91,942,807
- Number of top 1% returns: 101,940
- Average effective tax rate on 1% earners: 25.8%
- Total income tax share paid by 1%: 55.2%
- Average effective tax rate for all taxpayers: 15.8%
- Texas
- Total income tax paid by top 1%: $81,417,526
- Number of top 1% returns: 126,128
- Average effective tax rate on 1% earners: 26.0%
- Total income tax share paid by 1%: 46.7%
- Average effective tax rate for all taxpayers: 14.6%
- Illinois
- Total income tax paid by top 1%: $40,234,949
- Number of top 1% returns: 56,796
- Average effective tax rate on 1% earners: 26.0%
- Total income tax share paid by 1%: 44.8%
- Average effective tax rate for all taxpayers: 15.1%
- Massachusetts
- Total income tax paid by top 1%: $35,931,120
- Number of top 1% returns: 32,598
- Average effective tax rate on 1% earners: 26.6%
- Total income tax share paid by 1%: 45.8%
- Average effective tax rate for all taxpayers: 17.4%
- Pennsylvania
- Total income tax paid by top 1%: $31,046,021
- Number of top 1% returns: 59,123
- Average effective tax rate on 1% earners: 26.0%
- Total income tax share paid by 1%: 40.1%
- Average effective tax rate for all taxpayers: 14.0%
- New Jersey
- Total income tax paid by top 1%: $30,615,181
- Number of top 1% returns: 42,437
- Average effective tax rate on 1% earners: 27.2%
- Total income tax share paid by 1%: 37.7%
- Average effective tax rate for all taxpayers: 16.1%
- Washington
- Total income tax paid by top 1%: $27,320,236
- Number of top 1% returns: 35,456
- Average effective tax rate on 1% earners: 25.8%
- Total income tax share paid by 1%: 39.1%
- Average effective tax rate for all taxpayers: 15.9%
- Georgia
- Total income tax paid by top 1%: $24,761,176
- Number of top 1% returns: 45,961
- Average effective tax rate on 1% earners: 24.8%
- Total income tax share paid by 1%: 44.0%
- Average effective tax rate for all taxpayers: 13.9%
Top 10 States Where the Top 1% Pays the Highest Portion of the Income Tax Base
- Wyoming
- Total income tax share paid by top 1%: 61.7%
- Total income tax paid by top 1%: $3,160,269
- Number of top 1% returns: 2,616
- Average effective tax rate on 1% earners: 23.9%
- Average effective tax rate for all taxpayers: 15.7%
- Nevada
- Total income tax share paid by top 1%: 56.4%
- Total income tax paid by top 1%: $13,096,631
- Number of top 1% returns: 14,766
- Average effective tax rate on 1% earners: 25.3%
- Average effective tax rate for all taxpayers: 15.4%
- Florida
- Total income tax share paid by top 1%: 55.2%
- Total income tax paid by top 1%: $91,942,807
- Number of top 1% returns: 101,940
- Average effective tax rate on 1% earners: 25.8%
- Average effective tax rate for all taxpayers: 15.8%
- New York
- Total income tax share paid by top 1%: 52.8%
- Total income tax paid by top 1%: $99,157,333
- Number of top 1% returns: 92,142
- Average effective tax rate on 1% earners: 27.3%
- Average effective tax rate for all taxpayers: 17.3%
- Arkansas
- Total income tax share paid by top 1%: 50.7%
- Total income tax paid by top 1%: $6,311,373
- Number of top 1% returns: 12,184
- Average effective tax rate on 1% earners: 21.4%
- Average effective tax rate for all taxpayers: 12.4%
- Connecticut
- Total income tax share paid by top 1%: 49.4%
- Total income tax paid by top 1%: $19,699,624
- Number of top 1% returns: 16,811
- Average effective tax rate on 1% earners: 27.7%
- Average effective tax rate for all taxpayers: 17.7%
- Utah
- Total income tax share paid by top 1%: 47.3%
- Total income tax paid by top 1%: $9,151,169
- Number of top 1% returns: 13,739
- Average effective tax rate on 1% earners: 24.6%
- Average effective tax rate for all taxpayers: 13.6%
- Texas
- Total income tax share paid by top 1%: 46.7%
- Total income tax paid by top 1%: $81,417,526
- Number of top 1% returns: 126,128
- Average effective tax rate on 1% earners: 26.0%
- Average effective tax rate for all taxpayers: 14.6%
- California
- Total income tax share paid by top 1%: 45.8%
- Total income tax paid by top 1%: $165,087,786
- Number of top 1% returns: 177,645
- Average effective tax rate on 1% earners: 27.2%
- Average effective tax rate for all taxpayers: 16.9%
- Massachusetts
- Total income tax share paid by top 1%: 45.8%
- Total income tax paid by top 1%: $35,931,120
- Number of top 1% returns: 32,598
- Average effective tax rate on 1% earners: 26.6%
- Average effective tax rate for all taxpayers: 17.4%
Top 10 States With the Highest Effective Tax Rates on the Top 1% of Earners
- Connecticut
- Average effective tax rate on 1% earners: 27.69%
- Total income tax paid by top 1%: $19,699,624
- Number of top 1% returns: 16,811
- Total income tax share paid by 1%: 49.4%
- Average effective tax rate for all taxpayers: 17.7%
- New York
- Average effective tax rate on 1% earners: 27.30%
- Total income tax paid by top 1%: $99,157,333
- Number of top 1% returns: 92,142
- Total income tax share paid by 1%: 52.8%
- Average effective tax rate for all taxpayers: 17.3%
- New Jersey
- Average effective tax rate on 1% earners: 27.20%
- Total income tax paid by top 1%: $30,615,181
- Number of top 1% returns: 42,437
- Total income tax share paid by 1%: 37.7%
- Average effective tax rate for all taxpayers: 16.1%
- California
- Average effective tax rate on 1% earners: 27.16%
- Total income tax paid by top 1%: $165,087,786
- Number of top 1% returns: 177,645
- Total income tax share paid by 1%: 45.8%
- Average effective tax rate for all taxpayers: 16.9%
- New Hampshire
- Average effective tax rate on 1% earners: 26.72%
- Total income tax paid by top 1%: $5,090,444
- Number of top 1% returns: 6,742
- Total income tax share paid by 1%: 42.3%
- Average effective tax rate for all taxpayers: 15.5%
- Massachusetts
- Average effective tax rate on 1% earners: 26.58%
- Total income tax paid by top 1%: $35,931,120
- Number of top 1% returns: 32,598
- Total income tax share paid by 1%: 45.8%
- Average effective tax rate for all taxpayers: 17.4%
- Delaware
- Average effective tax rate on 1% earners: 26.16%
- Total income tax paid by top 1%: $1,936,324
- Number of top 1% returns: 4,662
- Total income tax share paid by 1%: 35.0%
- Average effective tax rate for all taxpayers: 13.3%
- Texas
- Average effective tax rate on 1% earners: 26.01%
- Total income tax paid by top 1%: $81,417,526
- Number of top 1% returns: 126,128
- Total income tax share paid by 1%: 46.7%
- Average effective tax rate for all taxpayers: 14.6%
- Illinois
- Average effective tax rate on 1% earners: 25.99%
- Total income tax paid by top 1%: $40,234,949
- Number of top 1% returns: 56,796
- Total income tax share paid by 1%: 44.8%
- Average effective tax rate for all taxpayers: 15.1%
- Virginia
- Average effective tax rate on 1% earners: 25.97%
- Total income tax paid by top 1%: $21,750,680
- Number of top 1% returns: 38,483
- Total income tax share paid by 1%: 36.8%
- Average effective tax rate for all taxpayers: 14.6%
Data and Methodology
SmartAsset analyzed the most recent data from the IRS for personal income tax returns (2021) to rank states by the total income tax paid by the top 1%. The effective tax rates for the 1% and total population were also compared, as well as the percent of total income tax collected contributed by the top 1% in each state.
Questions about our study? Contact us at press@smartasset.com
Photo credit: ©iStock.com/adamkaz
