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Here's how much it takes to earn a top 1 percent salary in Texas
Texans now need to make $130,241 more in 2024 to maintain their status as one of the highest earners in the state.
With two Houston-area neighbors cashing in among the most wealthy suburbs in America, Houstonains may be wondering how much money they need to make to secure a place in the top one percent of earners. According to a new study from SmartAsset, the pre-tax salary required to be considered one of the highest earners in Texas amounts to $762,090 in 2024.
Texas has the 14th highest pre-tax salary needed to be considered in the top one percent of earners in the U.S. for the second year in a row. Texas' income threshold is not too far off from the national average, which is $787,712.
The study further revealed 126,128 Texans are within the top one percent of earners. For more context, the U.S. Census Bureau says over 30 million people lived in Texas as of 2022, and Houston's population grew to 2.3 million people in 2023.
Connecticut continues to lead the nation with the highest income threshold required to be in the top one percent, with residents needing to make over $1.15 million pre-tax.
To determine the income needed to be in the top one percent of earners in each state, SmartAsset analyzed 2021 IRS data for individual tax filers, which is the most recent year where data was available. Income data was then adjusted to June 2024 dollars.
Compared to SmartAsset's 2023 report, Texans now need to make $130,241 more in 2024 to maintain their status as one of the highest earners in the state. Last year, the income threshold was $631,849.
If Houstonians aim to be within the top five percent of earners in Texas, the pre-tax income threshold is drastically lower, at $280,676. However, for many Houston residents, achieving even a "middle class" status means making between $40,280 and $120,852 a year.
Meanwhile, the study says the median income in the U.S. comes out to roughly $75,000, and half of Americans are making even less than that. The income disparity is plainly obvious when high-income earners make (at a minimum) 10 times more than the national median income.
The report goes on to say top-earning Americans make up a "disproportionately large part of the tax base," as their income results in paying a 37 percent federal tax bracket rate. (That is, if these high earners are even paying taxes in the first place, considering America's wealthiest are already evading over $150 billion a year in taxes.)
"While state and local level taxes may impact the spread of high earners in those areas, the cost of living can also be drastically different nationwide," the report said. "As a result, what it takes to be considered a top one percent income earner can differ by over $500,000 from state to state."
The top 10 states with the highest thresholds to be considered in the top one percent of earners in the U.S. are:
- No. 1 – Connecticut ($1,152,254)
- No. 2 – Massachusetts ($1,113,662)
- No. 3 – California ($1,035,673)
- No. 4 – Washington ($989,649)
- No. 5 – New Jersey ($975,645)
- No. 6 – New York ($965,645)
- No. 7 – Colorado ($865,700)
- No. 8 – Florida ($852,206)
- No. 9 – Wyoming ($843,121)
- No. 10 – New Hampshire ($811,098)
