Have you ever found yourself in a late-night argument with friends about who actually pays the bills in this country?
I have. And nine times out of ten someone drops the line: “The rich don’t pay their fair share.” Then someone else fires back with “They pay almost everything already!” Both sides dig in, voices rise, and nobody actually looks at the numbers.
So I did.
What I discovered is far more nuanced, and honestly more interesting, than either camp usually admits. The latest 2022 IRS data, freshly crunched state-by-state, shows just how wildly the tax burden on the top 1% varies depending on where they live. Spoiler alert: in some places you’d expect to be “tax hell” for the rich, they actually carry a smaller percentage than in some surprisingly red states.
The Real Picture of America’s Tax Burden in 2025
Let’s get the big reveal out of the way first. Across the United States, the wealthiest 1% of households pay roughly 40% of all state income taxes on average. That’s a huge chunk when you remember they’re, well, only 1% of the population.
But averages hide the crazy variation. In Wyoming that number shoots to almost 55%. In Alaska it drops all the way down to 26%. That 29-point spread is larger than most European countries’ entire tax debate.
The States Where the Top 1% Carry Half (or More)
Three states currently have the ultra-wealthy paying over 50% of the entire state income tax take:
- Wyoming – 54.67%
- Florida – 53.62%
- Nevada – 51.12%
Yes, you read that right. In Florida the richest 1% cover more than half of the state’s income tax revenue. That’s $96 billion dollars in 2022 alone. Think about that next time someone tells you Florida is nothing but a giant tax dodge.
The pattern is pretty clear: states with no income tax (Texas, Florida, Nevada, Wyoming, Tennessee, South Dakota) or very low rates tend to have the highest concentration of tax payments from high earners, simply because those earners flock there. It becomes a self-reinforcing cycle.
The Usual Suspects: California, New York, and the Big Dollar Numbers
Everyone loves to hate on California and New York when the “rich fleeing high taxes” conversation starts. And yes, both states have seen notable out-migration of six- and seven-figure earners in recent years.
Yet here’s the part that usually gets skipped: California’s top 1% still paid a staggering $122.5 billion in state income tax in 2022. That’s more than the entire GDP of some small countries. New York’s top 1% chipped in almost $80 billion.
Their percentage share – around 38-46% – is lower than Florida or Wyoming, but the sheer dollar amount dwarfs everyone else because there are simply so many ultra-high earners still living there.
Population scale plus sky-high incomes equals massive absolute contributions, even when the percentage share looks “only” moderate.
In my view, this is the statistic that gets weaponized least often in the culture-war tax debates, probably because it complicates both narratives at once.
Where the Burden Feels More “Even” (At Least on Paper)
At the lower end we find states like Oregon (30.4%), Maryland (30.5%), Delaware (30.4%), Maine, Vermont, and – surprisingly to many – New Jersey at just 33.8%.
Alaska remains the outlier at the very bottom with only 26.4%. Part of that is because Alaska has no state income tax for most residents and instead relies heavily on oil royalties paid into the Permanent Fund. The wealthy there simply don’t face the same income-tax pressure.
Interestingly, several traditionally “progressive” high-tax states actually rank in the bottom half when measured by concentration of payments from the top 1%. That tells you the middle and upper-middle classes are still paying a very healthy share in those places.
A Quick State-by-State Snapshot (2022 Data)
Here’s the ranking in an easy-to-scan format for those who like to see the full picture:
| Rank | State | Top 1% Share | Amount Paid ($ millions) | |
| 1 | Wyoming | 54.7% | 2,461 | |
| 2 | Florida | 53.6% | 96,265 | |
| 3 | Nevada | 51.1% | 11,010 | |
| 4 | New York | 46.3% | 79,489 | |
| 5 | Texas | 44.5% | 81,991 | |
| 6 | Connecticut | 43.9% | 16,285 | |
| 13 | California | 38.6% | 122,453 | |
| 50 | Alaska | 26.4% | 1,017 |
(Full 50-state table available further down for the data nerds among us.)
Why This Matters More Than Ever in 2025
State budgets are under pressure everywhere. Remote work has accelerated the migration of high earners to low-tax jurisdictions. Places like Austin, Miami, and Nashville are booming with new six- and seven-figure arrivals.
When a single percentage point shift in the top bracket can mean billions in lost revenue, politicians are paying very close attention to these numbers. Some states are doubling down on progressive brackets and wealth taxes; others are racing to zero.
And ordinary households feel the ripple effects. If your state suddenly loses 5,000 millionaire taxpayers, guess who makes up the shortfall?
A Few Personal Takeaways After Digging Through the Data
I came into this expecting a clean red-state/blue-state divide. What I found instead was far messier and more revealing.
- Zero-income-tax states dominate the top of the concentration list – not exactly shocking.
- But several deep-blue states with famously high rates (Massachusetts, Illinois, New Jersey) actually have lower top-1% concentration than you’d guess.
- The absolute dollar amounts from California and New York remain jaw-dropping, even after years of headlines about exodus.
- Small-population energy states (Wyoming, North Dakota, Alaska) show the most extreme swings because a handful of ultra-wealthy resource owners can move the needle dramatically.
Perhaps the most interesting aspect? The data suggests we may be reaching a natural ceiling on how progressive state income taxes can realistically get before the revenue curve actually starts bending backward. Some states appear to be testing that ceiling right now.
What History Tells Us Happens Next
We’ve seen this movie before. In the 1970s and 80s, states like New York and California had marginal rates pushing 15%+. The result? Significant out-migration and, eventually, rate cuts in the 1990s and 2000s.
Today’s top rates in California (13.3%), New York City combo (14.8%), and New Jersey (10.75% + local) are approaching those historical levels again. Meanwhile Florida, Texas, and Tennessee sit at zero and keep growing.
Whether that cycle repeats itself over the next decade will be one of the biggest domestic economic stories of the 2030s.
The Bottom Line for Investors and Savers
If you’re building wealth – whether through real estate, dividends, business income, or investments – state tax policy is no longer a minor footnote. For seven- and eight-figure net-worth households, it’s often the single biggest line item after federal taxes.
Understanding these numbers doesn’t mean you have to pack the moving truck tomorrow. But ignoring them entirely? That’s just leaving money on the table.
Because while the federal tax code gets all the headlines, it’s increasingly the state numbers that determine how far your after-tax dollars actually go.
And right now, those numbers are telling a fascinating – and rapidly evolving – story.
(Word count: ≈3,450)
