What it takes to reach the top 10% in every state
New state-by-state data reveals what it takes to reach the top 10% — and how living costs and inequality reshape what “rich” really means.
In the United States, a household needs anywhere between $198,000 and $387,000 in annual income to be considered among the top 10% earners. Breaking into the richest 10% looks very different in West Virginia than in Massachusetts.
To understand where America’s highest paychecks really are, the Germany-based tax platform BuchhaltungsButler and the Berlin-based data studio DataPulse Research ran the numbers. They compared gross (pre-tax) household income across states, showing where the cost of living can eat into earnings and noting where it’s hardest for middle-class households to climb the income ladder.
While many studies focus on the wealthiest individuals who sit at the very top of the income ladder, this study focuses on the population that just meets the limit for being within the top 10% of the country. This threshold marks the point where households earn significantly more than the vast majority (90% of the population), yet still low enough to reflect real households, not just the ultra-wealthy few. Household income accounts for all income earned by people within the same household who are at least 15 years old, even if they are not related.
In some states, $200,000 puts you in the top 10%. In others, it gets you about halfway there.
As the map below shows, the threshold to be in the top 10% is generally higher in the North Atlantic and the Pacific regions than in the middle of the country. In five states — Massachusetts, Connecticut, New Jersey, New York, and Washington — households need over $325,000 to crack the top tier. Washington, D.C., though not a state, stands alone as an outlier: The threshold there is roughly $635,000, driven by high-paying and traditionally stable jobs in government-affiliated industries such as law and policy.
Massachusetts leads the country on the high end: Households must earn a minimum of $386,800 to be considered in the richest 10% in the state. In West Virginia, $198,000 will make the cut. For those keeping score at home, this means households in Massachusetts that just crack the top tier have about double the income of their counterparts in West Virginia.
Dollars stretch further in some states
Even among the rich, geography matters: In some states, the same income buys twice the lifestyle. As the chart below shows, the threshold to be rich generally goes up with living costs. States on the right side of the chart have higher prices than the U.S. average — housing, energy, and everyday goods cost more. States on the left have lower costs, meaning every dollar buys a bit more comfort.
But not all high incomes are created equal. Some states, like Massachusetts or New Jersey, combine soaring prices with steep income thresholds, making them places where it’s expensive both to live and to be rich. Meanwhile, states such as Arkansas or Mississippi sit on the opposite end: Living costs are among the lowest in the country, while the threshold to be rich falls well below most other states.
States like Vermont, Minnesota, and Delaware offer some of the best value for high earners: strong incomes paired with moderate living costs. They are among 16 states where the rich are earning at least $270,000 annually, yet prices are below the national average, making those dollars stretch further than in relatively expensive places like California, Hawai’i, or New York.
In short, America’s map of income of the top 10% shows two kinds of privilege: earning a lot, and living where a lot goes further. That’s why the “best” state to be rich isn’t necessarily the one with the highest salaries, but the one where those salaries translate into real comfort.
However, the cost of living only explains part of the story. In some states, the real divide isn’t about rent and grocery prices, but about how much more the top households earn compared to everyone else. The next section compares households within the same state that are subject to similar costs of goods, to reveal where the gap between the rich and the middle class is widest.
The distance between the middle class and the top 10%
In every state, making it to the top 10% means earning at least double what the middle class earns. But that divide is much wider in some states. In New York, Connecticut, and Massachusetts, for example, middle-income households would need to roughly triple their earnings to join the top 10%. The chart below compares the households with median incomes (50th percentile) to the households right at the cusp of the richest group. The resulting gap shows how far the top has pulled ahead of the middle.
This gap is not new. It’s been gradually widening for decades, according to Pew Research Center, which noted in a report last year that middle-class incomes have not kept pace with upper-class incomes. Since 1970, upper-income households have increased 78% compared with only 60% for middle-income and 55% for low-income households. Across Europe, income gaps look narrower but follow the same trend. On average, the richest 10% of households earn about 107% more than the middle class, roughly double their income. In the U.S., by comparison, top earners make at least double — and sometimes triple — the median household income, reflecting greater income inequality. For more context, see the companion analysis on income inequality across Europe.
The challenge of defining the ‘rich’ in the US
Defining what it means to be “rich” in America is deceptively tricky because the numbers are so relative, both across the country and within individual states. This study shows that the definition depends heavily on where you live, what life there costs, and how it compares to other lower-income tiers in the state. For these reasons, a $200,000 household income may be considered solidly upper class in one state but closer to middle class in another.
At the same time, it’s worth noting that households earning enough to enter the top 10% occupy a very different reality from the ultra-wealthy few whose fortunes stretch into the millions or even billions. The difference between making it to the top 10% and the top 0.1% is vast and growing every year, as the highest echelons keep advancing upwards faster and faster. The richer the richest of us become, the harder it is to agree on what being rich even means.
Methodology
This study analyzed total household incomes by state. Values reflect the gross income thresholds to be in the top 10% of (90th percentile) and the middle class (median, or 50th percentile) in each state. Household income accounts for all income earned by people within the same household who are at least 15 years old, even if they are not related.
To measure inequality within states, researchers calculated the percent difference between the 50th and 90th percentile household incomes. The 50th percentile income, or the median, represents a typical “middle-class” household. This metric was chosen over an “average income” for the state because averages can be distorted by very high earners.
The relationship between income and cost of living is based on state-level price parity data from the U.S. Bureau of Economic Analysis (BEA). The data is based on an index where the states‘ values are relative to the country-level benchmark of 100.
Washington, D.C., was excluded from most of the analysis because its 90th-percentile household income for the city is substantially higher than that of any state and skews comparative scaling.
Underlying data for this study came from IPUMS USA, using the American Community Survey (ACS) 1-year sample.
This story originally appeared on BuchhaltungsButler, was produced in collaboration with DataPulse Research, and was reviewed and distributed by Stacker.
