NEW YORK (MainStreet) — How much money do you think it would take to make it into the top 1% of income earners in the United States? A million? A billion?
Actually, your annual income would have to be approximately $385,000 to be granted the honor of being part of the nation’s wealthiest elite. At least, these are the findings of a recent report by the Economic Policy Institute.
If that figure sounds like less than what you would guess, consider that as of 2010, an estimated 43% of Americans did not pay federal income tax because their annual incomes were too low to qualify, according to the Tax Policy Center. Additionally, census data released in 2011 revealed that one in two Americans is either living in poverty or barely surviving on low incomes. The low wages received, or complete poverty suffered, by nearly half of American adults, skews the ratio for what qualifies as being part of the 1%.
The annual income bar for entering the 1% can also vary widely by state, with many Southern states requiring a much lower income threshold as opposed to states in the Northeastern region--particularly those that have or are in close proximity to large metropolitan areas.
For instance, it would take an annual income below a quarter of a million dollars--or $228,000--to make it into the 1% of income earners in Arkansas. In Kentucky and West Virginia, the bar is in a lower range when compared to other states--$263,000 and $243,000, respectively. By contrast, one would need to make $678,000 a year to be in the 1% in Connecticut. The District of Columbia, New Jersey, Massachusetts and New York round out the top five of top income-earning states, all requiring roughly a half-million dollars per annual household income--or $555,000, $539,000, $532,000 and $506,000, respectively. Three Western states--California, Colorado and Texas--follow shortly behind at $438,000, $405,000 and $423,000, respectively. Meanwhile, Maryland comes in at tenth place at $419,000 required as the minimum threshold of annual income to enter into its 1%.