6 States Where the Top 1% Pay the Most in Taxes
Written by
Crystal Mayer
Edited by
Amen Oyiboke
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While the top 1% receives their fair share of bad press, the fact is that in many states, these elite earners contribute the lion’s share of taxes. In fact, in some areas, the top 1% pays over 50% of the state’s taxes.
Financial tech company SmartAsset recently examined IRS data to determine where high-income earners contributed the largest amount.
Here are the six states where the top 1% pays the most in taxes.
Wyoming
Topping the list for where the top 1% contributes the most toward taxes is Wyoming. In the home of Yellowstone National Park, the state’s highest earners pay for just shy of 55% of income taxes. According to the study, the top 1% consists of 2,611 households with an average adjusted gross income (AGI) of $4,079,658. Interestingly, these elite earners also face the lowest effective tax rate in the nation at 23.1%.
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Florida
The Sunshine State ranks second for states where the top 1% contributes the largest share of income taxes. According to SmartAsset, Florida’s top 1% consists of 105,101 households with an average AGI of $3,525,962. These high earners account for nearly 54% of the federal income taxes in the state.
While the one-percenters may pay for a large share of taxes, they often flock to states like Florida, which have no state income tax. As reported by CNBC, states that do not have a state income tax often make up for it through property taxes or lower spending on things like infrastructure and education. Florida’s average public school spending in 2024 was $12,415 per student, the lowest in the country.
Nevada
Nevada is another state with no state income tax, where the top 1% of households contribute to over 50% of the taxes. Elite earners, who total 14,754 households, earn just under 30% of the total income in the state, but pay for 51% of income taxes.
New York
The top 1% of earners in New York pay around 46% of the income taxes while earning approximately 28% of the total income. The effective tax rate on these high-income earners is 27.62%. These earners, which consist of 91,840 households, contributed nearly $79.5 billion in taxes.
Texas
The Lone Star State ranked 5th on the list for states where the top 1% contributes the largest share of income taxes. According to the study, elite earners pay for nearly 45% of the total income taxes, amounting to nearly $82 billion.
While top earners contribute a large portion of the taxes, you won’t find these Texans paying state income tax. Texas is one of the handful of states without a state income tax. One way the state pays for things like education is through a state lottery. According to the Fort Worth Report, the Texas state lottery has generated nearly $40 billion in revenue since its launch in 1992. Annually, nearly 24% of those revenues are transferred to the state’s school fund.
Connecticut
Rounding out the list of states where the top 1% pays the largest share of income taxes is Connecticut. The state’s highest earners pay nearly 44% of its income taxes. They also have the highest average effective tax rate at 28.09%. These earners contribute over $16 billion in income tax, which is impressive considering the top 1% in the state consists of only 16,917 households.
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