A Dramatic Upsurge: The One Percent in Texas are Making Substantial Income in 2024
The one percent in Texas are making a splash with their steep income levels. According to a new study from SmartAsset, to be counted among the highest earners in the state, Texans in 2024 need a pre-tax income of a whopping $762,090.
A Surprising Rise in the Income Threshold
Surprising it may seem, but the numbers do not lie. This figure represents a significant increase from the previous year. In 2023, the income threshold stood at $631,849. This means Texans now need to earn $130,241 more in 2024 than they did in the previous year to maintain their status amongst the state’s highest earners.
This consistent surge marks the second consecutive year that Texas has held the 14th spot for the highest pre-tax salary required for an individual to be considered in the top one percent of earners in the U.S.
Methodology of the Study
To ascertain the income required to belong to the top one percent of earners in each state, SmartAsset analyzed 2021 IRS data for individual tax filers, which constitutes the most recent year where such data is available. It then adjusted the data to reflect June 2024 dollars.
Texas vs. National Average
The Lone Star State’s one percent income threshold isn’t far from the national average, calculated at $787,712. The report revealed that 126,128 Texans are among the top one percent earners. Comparatively speaking, the U.S. Census Bureau recorded over 30 million people living in Texas in 2022.
The Leading States
Connecticut continues to lead the nation, with individuals needing to make over $1.15 million pre-tax to be pegged in the top one percent. If Texans desire to be in Texas’ top five percent earners, their pre-tax income must be significantly lower, at $280,676.
Understanding Income Disparities
Income disparities become evident when we compare high-income earning individuals with middle-class citizens and the national median income. For many Austin residents, achieving a ‘middle class’ status means making between $59,604 and $178,830 a year. In contrast, the national median income is approximately $75,000, with half of Americans earning less.
The report highlights that the top one percent of American earners compose a ‘disproportionately large part of the tax base,’ owing to their income putting them in a federal tax bracket rate of 37 percent. This fact is considering that America’s wealthiest individuals already evade more than $150 billion annually in taxes.
Income Variations Across States
The study explains that the disparity in the income required to be considered a top one percent earner often significantly differs from state to state. Such disparities can be $500,000 or more because both state and local level taxes and cost of living aspects can drastically vary nationwide.
The Top 10 States
The states with the highest thresholds to be considered among the top one percent earners are as follows:
- Connecticut ($1,152,254)
- Massachusetts ($1,113,662)
- California ($1,035,673)
- Washington ($989,649)
- New Jersey ($975,645)
- New York ($965,645)
- Colorado ($865,700)
- Florida ($852,206)
- Wyoming ($843,121)
- New Hampshire ($811,098)
More on the SmartAsset report can be found here.
