From The Center Square
The top 1 percent of earners in Florida are taxed at an effective rate of 2.3 percent, compared with the state’s 8.1 percent tax rate on the middle 20 percent of income earners, according to a new 24/7 Wall St. analysis.
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.
Nationwide, the top-earning 1 percent of families pay 7.4 percent of what they make toward state and local levies, the ITEP study concluded. The middle 20 percent of U.S. earners, in contrast, paid more – 9.9 percent.
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