How Much Money the Top One Percent in Texas are Earning
In the Lone Star State, the pre-tax income required to be among one of the highest earners has reached a staggering $762,090 in 2024, according to a fresh study from SmartAsset. This new figure is nearly $130,241 higher than last year’s threshold, which was $631,849. With such high income turnover, the disparity in income levels in Texas is no longer a trivial issue.
SmartAsset’s One Percent Income Findings
SmartAsset, in its study, examined the top one percent income floors for all 50 states. The Texas bracket stood at the 14th highest pre-tax salary across the U.S. To reach this conclusion, SmartAsset considered 2021 IRS data for individual tax filers, adjusting this information to reflect June 2024 dollars.
How Does Texas Compare Nationally?
Nationally, the average income threshold for the top one percent earners is $787,712. Therefore, Texas’ threshold doesn’t deviate much from the national average. In terms of figures, approximately 126,128 Texans qualify as one percenters. To give some context, Texas had a population of over 30 million people in 2022, with the state’s capital, Austin, recording close to 980,000 residents in 2023.
The Stark Contrast Between Middle Class and Top Earners in Texas
The contrasting lives of the middle class and the top earners in Texas couldn’t be starker. For an Austinite to attain the status of ‘middle class’, they need to earn a pre-tax income between $59,604 and $178,830 per year. The median annual income in the U.S., as determined by the study, is roughly $75,000. This means at least half of the American citizens earn less than $75,000, shining a light on the severe income disparity as top-earning Americans make a minimum of 10 times more than the national median income.
The Influence of the Wealthy
The report sheds light on another crucial aspect – the disproportionately large contribution of top-earning Americans to the tax base. As their income pushes them into the 37 percent federal tax bracket, they pay a more significant portion of their income as tax compared to the rest of the population. However, it’s crucial to note that not all high earners are paying taxes, with some of the wealthiest American evading over $150 billion in taxes per year.
Influence of State and Local Taxes and Cost of Living
“The cost of living and state and local level taxes can impact high earners’ spread in those areas. As a result, what it takes to be considered a top one percent income earner can differ by over $500,000 from state to state,” said the report. Among the states with the highest thresholds for the top one percent of earners are Connecticut, which requires a pre-tax income above $1.15 million, followed by Massachusetts, California, Washington, and New Jersey, among others.
