Being rich isn’t just about how much you earn or inherit. It also depends on where you live. In some places, the wealthy can get more bang for their bucks for a variety of reasons.
In a new study, MoneyRates.com ranked the best and worst states to live in when you’re rich, taking into account three factors:
- The average income of the top 10 percent of state residents
- State income tax rates
- Property crime rates
The results might surprise you. For example, Washington state has the eighth-highest rate of earnings in terms of the top 10 percent and it has no state income tax. When it comes to property crimes, however, you’re twice as likely to be victimized in Washington as in New York or New Jersey.
Mississippi has the lowest top-tier earnings level in the country, with an average annual income of $66,740. Yet it’s not ranked as the worst state to live in if you’re rich.
Which one is? We’ll get to that. But we’re starting with the 10 best places to be wealthy.
10. New York
Wall Street, amirite? Yet interestingly, New York’s top 10 percent income level ($114,750) is not number one in the nation. That’s one of the reasons that the Empire State isn’t the best place in the country to be rich. In fact, it’s only the 10th best.
In addition, New York is among the worst states for taxing the rich, with a top bracket of 8.82 percent.
However, here’s a fact that will probably surprise you: It has the second-lowest property crime rate in the country. (Remember, New York state is far more than just the five boroughs of New York City.)
Cities like Detroit and Flint have had widely publicized financial struggles, and Michigan’s poverty rate of 15.8 percent exceeds the national rate.
But apparently the Great Lakes State isn’t a bad place for the wealthy. It’s in the top 15 for low rates of property crime and also reasonable tax rates.
The property crime rate could be better. However, Colorado is in the top 10 for income, and its taxes are bearable.
The Equality State has no income tax, and boasts the 11th-lowest property crime rate in the country.
The Mercatus Center at George Washington University ranks Wyoming among the top five most fiscally healthy states.
6. New Hampshire (tie)
No gigantic advantages here – just a good across-the-board rating in each category.
Another example of a state that didn’t make it into the top 10 in any specific category, but that did well overall in terms of reasonable taxes, low property crime rates and top-tier earnings.
The Old Dominion came in sixth in top-tier earnings and has the eighth-lowest property crime rate in the country. It tied with Alaska for the sixth best place to be rich.
The Last Frontier is one of nine states where the top 10 percent of earners make at least $100,000 — and there’s no state income tax.
Bonus: If you stick around, you’re eligible for an annual check from the Alaska Permanent Fund.
The property crime rate is pretty high, however.
When it comes to its top 10 percent earners, Pennsylvanians are almost halfway down the list with an average of $87,710. But that’s not all it takes to be wealthy.
The Keystone State features the 10th-lowest tax rate on high-earning residents and has the 10th-lowest property crime rate nationwide.
Fun fact: Pennsylvania Gov. Tom Wolf is the highest-paid governor in the nation, earning $190,823 per year.
Residents joke darkly about living in “Taxachusetts,” but advantages do exist.
The Bay State has the highest top-tier average annual income in the country, at $116,060. It also has fifth-lowest property crime rate in the U.S.
And now for the worst states to be rich.
No single category in the Cornhusker State is ghastly. However, the state is about average for property crime and below average in the other two categories.
On the bright side: According to the Council of State Governments, Nebraska’s median household income level rose by 4.3 percent in the past few years.
And it’s only the 10th-worst state to live in if you’re rich. Um, yay?!?
Tax-wise it’s not so bad. However, Tennessee ranks among the 10 worst states for both property crimes and income.
The state does all right with earnings, but has the second-highest top tax rate in the country. Ouch.
7. Mississippi (tie)
In terms of the top 10 percent income level, the Magnolia State is the absolute last nationwide. To make matters worse, Mississippi has the 15th-highest property crime rate in the country. It ties with Hawaii among the worst places to be rich.
On the bright side: According to the Economic Policy Institute, the state has the nation’s lowest child care costs.
The top earners do pretty well here. However, both income tax rates and property crime rates are high.
People living in the Hawkeye State don’t earn much. Worse, its top income tax rate is the fourth-highest in the country, at 8.98 percent.
Its next-door neighbor, Wyoming, was noted above as the seventh-best place for the rich. However, Montana residents earn much less, pay higher taxes and face higher property crime rates.
While its tax rates aren’t too awful, Louisiana is among the 10 worst for property crime rates and top-10 percent income level.
The state also has the nation’s highest rate of unbanked households, at 14 percent.
At least it’s not the absolute worst state to live in if you’re rich. Two others are ranked ahead of (or behind, depending on how you think about it) the Pelican State.
Having a high top tax rate and being among the 10 worst states for property crime rates and top income level makes this state a natural for ranking near the bottom.
But not at the absolute bottom. That (dis)honor goes to …
1. South Carolina
Congratulations, South Carolina: You’re No. 1! That is, you’re the No. 1-worst place to be rich.
The top-10 percent average income here is $74,990 — that’s more than $40,000 less than top-ranked Massachusetts.
South Carolina’s top tax rate is higher than most states, and the state has the third-highest rate of property crime in the U.S.
If your state wasn’t listed, click here to find out where it’s ranked.
How does your state rate as a place to be rich? Share with us in comments below or on our Facebook page.
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