Just as varied as humans are from one person to the next, so are their incomes. Median income is that level of earnings at which one-half of all earn more and one-half earn less. Average earnings is the sum of all earnings divided by the total number of workers. The ultimate aspiration, income wise, would to be included in the top 1 percent of all earners.
Once again the TINSTAANREM axiom is invoked — There Is No Such Thing As A National Real Estate Market or economy. Not only do earnings vary from person to person, so does the cost of living. Income and cost of living, however, are not perfectly correlated. Likewise, income disparity varies across and within states.
To identify what it takes to be included in the top 1 percent of all earners in each state (and also what the top 1 percent earn on average), 24/7 Wall Street analyzed the gross income percentile data for the 2017 tax year from the IRS. They calculated the average income and income taxes for the top 1 percent and the overall average income by state. Income data were adjusted for inflation using the Consumer Price Index from the U.S. Bureau of Labor Statistics for 2017 and 2019.
The first table shows the minimum earnings required to be included in the top-1 percent of all earners, by state, sorted from most to least. Connecticut tops the list at $827,194. That is 2.6 times the top 1 percent minimum earners in West Virginia at $318,831. Not only does Connecticut have the greatest hurdle to be included in the top 1 percent of earners, but the multiple of the minimum top 1 percent earner to the average earner statewide is also the greatest at 7.3 times. That ratio is one measure of income disparity — the greater the multiple, the larger the level of income disparity.
The next table ranks the average annual earnings by the top 1 percent and also compares those as a multiple to the average earnings statewide. One again Connecticut tops the list at $3.06 million. The largest income disparity using this metric is New York, where the average top 1 percent of earners make 29.3 times more than the average tax payer. West Virginia has the lowest average earnings among the top 1 percent at $651,628 and also comes in with the lowest measure of disparity given the 11.1 multiple compared to average earners statewide.
The next table ranks states by the percentage of all earnings within the top 1 percent. This is the best indicator of income disparity by state among these metrics. Income disparity is almost three times greater among the top two states (New York at 29.3 percent and Florida 28.4 percent) when compared to the bottom two (Alaska 11.9 percent and West Virginia 11.1 percent).
Average earnings by state among all taxpayers are shown in the next chart, ranked from most to least. Average income in Connecticut ($113,570) is more than double that of Mississippi – with the lowest average income of $55,999.
All data are shown in the last table, sorted alphabetically by state.
To read the entire 24/7Wall Street study click https://247wallst.com/special-report/2020/06/23/how-much-you-need-to-make-to-be-in-the-1-in-every-state-2/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_campaign=DailyNewsletter&utm_content=JUN242020a