How Many Wealthy People Are There?

With the recent battles over tax laws we have heard a lot about the wealth and that their percentage of the tax burden should increase.  I have found a little bit of information at the Tax Foundation which gives some interesting estimates of how many wealthy people are in each state.  We have heard attempts to define the wealthy as those who earn over $250,000 per year and the recently enacted legislation tries to define them as those who earn over $400,000 or $450,000.  The Tax Foundation has used a number of $500,000.    Using that number we find that roughly one half of one percent of American taxpayers earn more than $500,000 per year.  The average of the various states is .493%.  Since the IRS has also broken down the numbers using the $500,000 number, that is a convenient number to use.

In Colorado, we are in about the middle with .57% of taxpayers earning more the $500,000.  The “wealthiest” state is Connecticut at 1.34%, followed by New Jersey at .98%, New York at .95% and Massachusetts at .94%.  California is number 5 at .72%.. No other states exceeded .67%.  The least wealthy states were West Virginia at .25%, Mississippi at .26% and New Mexico at .28%.  There were eight states bunched closely together between .32 and .35%.

So, if .5% of us taxpayers are wealthy and we know there are approximataely 138 million tax return filers (ony about half of those pay income tax) in the US, then there must be about 690,000 wealthy taxpayers who earn more than $500,000 per year.

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