It's good to be rich, but it's better in some states than in others.
MoneyRates.com looked at where conditions most favor the wealthy, and where they might feel a little less welcome.
To get things started, consider this question: What income does it take to be considered rich? Well, being in the top 10 percent puts you in pretty elite company, and nationally that means making at least $90,060. The state with the highest income level at the top tenth percentile is Massachusetts, at $109,990. Conditions can vary from state to state.
Factoring in top-tier income levels, tax rates and property crime, here are lists of the 10 best and worst states to be rich:
The 10 best states to be rich
- Virginia. A top 10 percent income in Virginia will earn you at least $101,660, the 6th-highest such figure in the nation. Virginia is also in the top 10 for property security based on its low property crime rate, and had a better overall tax score (meaning lower rates) than the typical state.
- Colorado. Former quarterback and current football executive John Elway may be one of the most famous people in this state, but it is his boss, Denver Broncos owner John Bowlen, who benefits even more from Colorado's favorable conditions for rich people, with his estimated net worth of $1 billion. With one of the lowest tax burdens for high incomes and property in the nation, it is easy to see why rich people would be attracted to Colorado.
- Massachusetts. As noted previously, Massachusetts tops the nation in top-decile income, and also ranks in the top 10 for security with its low property crime rate. As an added benefit, Massachusetts made the MoneyRates list of the Best States for Banking earlier this year, which is helpful to all those wealthy residents looking for a good place to find jumbo CDs and savings accounts.
- Wyoming. Former Vice President Dick Cheney once represented Wyoming in Congress, and as a wealthy conservative, his attraction to the state is understandable - it boasted the best overall score in this study for low taxes.
- Alaska. With no state income tax and one of the best top-decile income levels in the country, Alaska is a pretty good state to be rich. While Alaska did make the MoneyRates list of Worst States for Banking this year, the growth of online banks has made high interest savings accounts available even to people in the remotest parts of Alaska.
- Pennsylvania. A low property-crime rate gave Pennsylvania one of the top 10 scores for security, and it also ranked above average for top-decile income and being tax-friendly for the wealthy.
- New York. Featuring places such as Wall Street and Park Avenue, New York is often associated with wealth, but what might surprise you is that it also features one of the lowest property crime rates in the nation. As you might expect from such a renowned financial center, New York earned a place on the MoneyRates list of Best States for Banking, which is an added plus. One thing to watch out for though - it places one of the nation's highest tax burdens on the wealthy.
- North Dakota. It's not exactly thought of as a playground for the rich, but North Dakota has enjoyed an impressive economic boom in the past few years. Its top incomes may not be on a par with the richest states, but high-earners keep more of their wealth thanks to a relatively low tax burden, and their possessions are secure with the lowest property crime rate in the nation. Like Alaska though, North Dakota is somewhat remote and landed on the MoneyRates list of the Worst States for Banking, so wealthy residents may want to turn to online banks to place their jumbo CDs and savings accounts.
- Connecticut. Connecticut is one of the 10 best states for both top-tier income levels and low property crime. It helps to make a lot of money in Connecticut because it does have one of the highest tax burdens nationally.
- Nevada. A state known for high-rollers is helped into this top 10 primarily by having no personal income tax and relatively-low property taxes. Top-tier incomes and the property crime rate are about middle of the pack.
The 10 worst states to be rich
- Arkansas. The Walton family may have built one of America's greatest fortunes from its Wal-Mart and Sam's Club stores, but in general, Arkansas is not such a great incubator for wealth. The state's standard for top-tier incomes is 25 percent below the national standard, and if you do have wealth, you need to guard it carefully because the state has the second-highest rate of property crime.
- South Carolina. Which state beat out Arkansas for the highest rate of property crime? That would be South Carolina, which also ranked in the bottom 10 for the level of top-tier incomes. As a final negative for people with money, South Carolina also made the MoneyRates list of the Worst States for Banking.
- Nebraska. You may already have guessed this, but Warren Buffett is not typical. The "oracle of Omaha" may be one of the world's richest men, but he doesn't have a lot of company in his home state. The standard for top-tier incomes in Nebraska is nearly 19 percent below the national average, and the state places one of the worst tax burdens on personal wealth.
- Tennessee. The biggest threat to wealth in Tennessee is its high level of property crime, and the state is also well below average in the level of top-tier incomes.
- Louisiana. Property taxes are especially low in Louisiana, but fewer people are in a position to take full advantage of this because top-tier incomes are also relatively low. Louisiana is also another state that suffers from a high rate of property crime.
- Ohio. Ohio isn't terrible in any one category, just below average in all three. So, LeBron James' return to the state notwithstanding, Ohio is not a particularly good state for the rich.
- Montana. The top personal income tax rate in Montana is higher than that of most states, and it has one of the lowest levels of top-tier incomes. That was enough to drag the state down despite its having a lower property crime rate than most states.
- Iowa. The top-end income tax rate in Iowa is one of the steepest in the nation, and Iowa also ranks in the bottom 10 for the level of top-tier incomes.
- Georgia. Georgia actually ranks above most states for the level of top-tier incomes, but high tax and property crime rates pose serious challenges for those high earners.
- Maine. Despite a relatively low property crime rate, Maine's wealthy have one of the highest tax burdens in the country, and the standard for top 10 percent incomes is also well below that of most other states.
Again, being rich isn't a bad deal in any state. Still, if you could live in a state where top-tier incomes are a little higher, taxes are lower, and property crime is less common, it would make being wealthy all the sweeter.
Here are is the full ranking for all 50 states for best and worst states to be rich:
|Overall Rank||State||Low Property Crime Rate Rank||Top Decile Income Rank||Low Tax Rank|
Some states were tied with each other and have the same ranking.
State rankings were based on three main categories:
- Top-tier incomes. The top 10 percent of earners are probably viewed as wealthy in any state, but in some states being in the top 10 percent means a much higher income than in others. Higher levels of top-tier incomes were rewarded with higher scores in this study.
- Taxes. Specifically, MoneyRates looked at two areas of taxation that particularly impact the wealthy: top-tier state tax rates and property taxes. The lower the overall burden posed by these two factors, the better the state scored in this study.
- Property crime. People who have nice things can be a target, so MoneyRates looked at property crime rates from the U.S. Department of Justice. States with low property crime rates were rewarded with higher scores.
Where total scores were tied, top decile income was used as the tie-breaker.
- FBI, Uniform Crime Reports
- U.S. Bureau of Labor Statistics, Occupational Employment
- Tax Foundation, Facts & Figures 2015 Statistics