HOW MUCH THE RICHEST 1% PAY IN TAXES ON THE WEST COAST

The U.S. West Coast covers a lot of territory but involves very few states, at least compared with the East Coast. Only five states touch the Pacific Ocean – and they all rank among the 10 most expensive in the country in terms of living costs for the average family. For most rich folks on the West Coast (and elsewhere), those higher costs also extend to the income taxes they pay.

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The West Coast is home to a couple of states where the top 1% of earners pay the most in federal income taxes, according to a GOBankingRates study of 2020 IRS data. Those states are California (No. 6 on the list) and Washington (No. 8).

Here’s a look how much the richest 1% of West Coast residents pay in taxes, along with their typical incomes and tax rates:

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Alaska

  • Minimum income to be considered 1%: $466,905
  • Average income of the 1%: $999,772
  • Average income tax paid by the 1%: $253,754
  • Average tax rate of the 1%: 25.38%

Check Out: Here’s the Income Needed To Be in the Top 1% in All 50 States

California

  • Minimum income to be considered 1%: $726,188
  • Average income of the 1%: $2,430,790
  • Average income tax paid by the 1%: $655,180
  • Average tax rate of the 1%: 26.95%

Hawaii

  • Minimum income to be considered 1%: $425,996
  • Average income of the 1%: $1,220,687
  • Average income tax paid by the 1%: $294,372
  • Average tax rate of the 1%: 24.12%

Oregon

  • Minimum income to be considered 1%: $491,840
  • Average income of the 1%: $1,290,794
  • Average income tax paid by the 1%: $318,327
  • Average tax rate of the 1%: 24.66%

Washington

  • Minimum income to be considered 1%: $692,287
  • Average income of the 1%: $2,121,289
  • Average income tax paid by the 1%: $551,288
  • Average tax rate of the 1%: 25.99%

While California and Washington both rank high on the list, their tax obligations are still much lower than what you will find in certain East Coast states. Here are the five states where the richest 1% pay the most in taxes:

  1. Connecticut: $850,486
  2. Wyoming: $827,796
  3. New York: $745,923
  4. Massachusetts: $710,286
  5. Florida: $673,926

You can expect those figures to trend higher in the coming years. An analysis of U.S. government data from the Tax Foundation found that the top 1% of earners in the United States paid average income taxes of $653,730 in 2021, the latest year data are available. That compares to $50,963 for the top 25% of earners and $667 for the bottom 50%.

Of course, the wealthiest Americans also earn a lot more money than everyone else. The top 1% earned an average annual adjusted gross income of about $2.5 million in 2021, according to the Tax Foundation. The top 25% earned an average of $276,414, while the bottom 50% earned an average of just less than $20,000.

Under the U.S. tax system, the highest-earning Americans also pay the highest tax rates. The top federal income tax rate in 2024 is 37%. That rate applies to incomes of $609,350 and higher for single taxpayers and $731,200 and higher for couples filing jointly.

Here are the other rates for tax year 2024, according to the IRS:

  • 35% for single filer incomes over $243,725 ($487,450 for married couples filing jointly)
  • 32% for single filer incomes over $191,950 ($383,900 for married couples filing jointly)
  • 24% for single filer incomes over $100,525 ($201,050 for married couples filing jointly)
  • 22% for single filer incomes over $47,150 ($94,300 for married couples filing jointly)
  • 12% for single filer incomes over $11,600 ($23,200 for married couples filing)

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This article originally appeared on GOBankingRates.com: How Much The Richest 1% Pay In Taxes On The West Coast

2024-09-04T14:16:11Z dg43tfdfdgfd