From The Center Square
The study, which used data from a 2018 report by the Washington-based Institute on Taxation and Economic Policy (ITEP), did not include federal taxes paid. Florida ranked second on the study’s list of the most tax-friendly states for the rich.
On average, the top 1 percent of earners in the state takes in $2.3 million annually, according to 24/7 Wall St.
States with no income tax – or a very low-income tax – tended to be the most friendly to wealthy individuals, 24/7 Wall St. reported. That’s because those states tend to rely more on more regressive taxes, placing more of a burden on poorer households, the study found.
Which States Are the Most Tax-Friendly to the Wealthy?
| Rank | State | Effective Tax Rate for Top 1% of Income Earners | Effective Tax Rate for Middle 20% of Income Earners | Average Income for Top 1% | State and Local Revenue From Sales Taxes | State and Local Tax Revenue From Income Taxes |
| 1 | Nevada | 1.9% | 7.6% | $1.7 million | 39.4% | 0% |
| 2 | Florida | 2.3% | 8.1% | $2.3 million | 34.1% | 0% |
| 3 | South Dakota | 2.5% | 8.9% | $1.5 million | 39.6% | 0% |
| 4 | Alaska | 2.5% | 4.3% | $1.1 million | 8.3% | 0% |
| 5 | Wyoming | 2.6% | 7.5% | $2 million | 25.2% | 0% |
| 6 | Tennessee | 2.8% | 8.5% | $1.3 million | 41.5% | 1.5% |
| 7 | Washington | 3% | 11% | $1.6 million | 46.4% | 0% |
| 8 | New Hampshire | 3.0% | 8.1% | $1.5 million | 0% | 1.4% |
| 9 | Texas | 3.1% | 9.7% | $1.6 million | 35.4% | 0% |
| 10 | North Dakota | 4.5% | 8.5% | $1.3 million | 25.6% | 7% |
| 11 | Alabama | 5% | 9% | $955,600 | 30.7% | 23.2% |
| 12 | Arizona | 5.9% | 9.4% | $1.1 million | 38.7% | 16% |
| 13 | Pennsylvania | 6% | 11.1% | $1.3 million | 17.2% | 26.2% |
| 14 | New Mexico | 6% | 10.2% | $845,400 | 37.8% | 17.4% |
| 15 | Louisiana | 6.2% | 10% | $1 million | 41% | 15.7% |
| 16 | Oklahoma | 6.2% | 10.7% | $1.1 million | 33.3% | 22.1% |
| 17 | Missouri | 6.2% | 9% | $1.2 million | 27.3% | 28.6% |
| 18 | Michigan | 6.2% | 9.2% | $1.3 million | 22.6% | 24.2% |
| 19 | North Carolina | 6.4% | 9.4% | $1.1 million | 25% | 30.3% |
| 20 | Colorado | 6.5% | 8.9% | $1.5 million | 26.5% | 25.4% |
| 21 | Ohio | 6.5% | 10.7% | $1.1 million | 28.2% | 25.6% |
| 22 | Massachusetts | 6.5% | 9.3% | $2.5 million | 13.8% | 32.7% |
| 23 | Montana | 6.5% | 7.1% | $1.1 million | 0% | 29.7% |
| 24 | Delaware | 6.5% | 5.6% | $1 million | 0% | 25.8% |
| 25 | Utah | 6.7% | 8.2% | $1.3 million | 24.8% | 29.6% |
| 26 | Kentucky | 6.7% | 11.1% | $935,400 | 20.4% | 33.3% |
| 27 | Mississippi | 6.7% | 10.8% | $802,200 | 30.6% | 16.7% |
| 28 | Indiana | 6.8% | 11.1% | $1 million | 28.4% | 25.5% |
| 29 | South Carolina | 6.8% | 8.1% | $992,300 | 22.1% | 22.7% |
| 30 | Arkansas | 6.9% | 10.8% | $1.1 million | 37.5% | 23.5% |
| 31 | Virginia | 7% | 9.2% | $1.4 million | 13.8% | 31.9% |
| 32 | Georgia | 7% | 9.8% | $1.2 million | 24.1% | 27.7% |
| 33 | Idaho | 7.2% | 8.1% | $1 million | 26.5% | 25.8% |
| 34 | Kansas | 7.4% | 10.6% | $1.3 million | 32.1% | 17.1% |
| 35 | West Virginia | 7.4% | 8.5% | $702,400 | 18.4% | 25.8% |
| 36 | Illinois | 7.4% | 12.6% | $1.7 million | 19.3% | 19% |
| 37 | Wisconsin | 7.7% | 10.1% | $1.2 million | 19.8% | 27.1% |
| 38 | Iowa | 7.7% | 10.7% | $960,000 | 22.8% | 23.9% |
| 39 | Rhode Island | 7.9% | 9.5% | $1.1 million | 16.6% | 21% |
| 40 | Oregon | 8.1% | 9.1% | $1.1 million | 0% | 41.7% |
| 41 | Connecticut | 8.1% | 12.2% | $3.2 million | 14.5% | 29.2% |
| 42 | Maine | 8.6% | 9.6% | $877,200 | 19.6% | 22.4% |
| 43 | Nebraska | 8.7% | 10.8% | $1.1 million | 22.4% | 23.1% |
| 44 | Hawaii | 8.9% | 11.6% | $984,200 | 37.2% | 22.9% |
| 45 | Maryland | 9% | 10.6% | $1.5 million | 12.4% | 37.8% |
| 46 | New Jersey | 9.8% | 10.1% | $1.9 million | 15.4% | 22.2% |
| 47 | Minnesota | 10.1% | 9.7% | $1.5 million | 17.1% | 31.9% |
| 48 | Vermont | 10.4% | 10.1% | $993,600 | 10.4% | 19.8% |
| 49 | New York | 11.3% | 12.4% | $2.5 million | 16.7% | 32.7% |
| 50 | California | 12.4% | 8.3% | $2.2 million | 21.9% | 33.8% |
Source: 24/7 Wall St.; Institute on Taxation and Economic Policy
