According to a study released by the financial website Go Banking Rates on July 17th, in order to rank among the top incomes in California, a household must earn over $1 million annually.
California, with a population of approximately 39 million, had nearly 20 million filings for income tax returns for the year 2021 in 2022. The study indicated that about 200,000 California households have annual incomes exceeding $1 million, adjusted for inflation to 2024 dollars.
Researchers initially expected the West Coast to have the highest income rankings in the United States, but they “unexpectedly” found that the income threshold for the “top 1% group” in states like Connecticut and Massachusetts was higher.
Five states in the U.S., including Connecticut, Massachusetts, California, Washington, and New Jersey, have annual incomes for the top 1% group reaching seven figures.
New York closely follows, missing out on joining the million-dollar club by just $253.
In states with lower incomes, the annual incomes of the top 1% group are less than $500,000. These states include New Mexico, Mississippi, and West Virginia.
In another study published by Go Banking Rates on July 2nd, it was found that the incomes of the top 5% earning families, considered “wealthy,” are on the rise nationwide.
According to the latest data from the IRS, from 2017 to 2022, the average income for the top 5% of families in California surged by over 37%, increasing from under $450,000 to over $613,000.
All states in the U.S. saw increases during the same period, with Washington state having the largest average increase – nearly 44%, rising from over $378,000 to almost $545,000; and North Dakota’s average increase approaching 15%, from around $365,000 to about $419,000, the lowest nationwide.
The study pointed out that currently, households in 12 states need to have annual incomes of at least $500,000 to be considered “wealthy,” a significant increase from 2017 when only Washington D.C. and Connecticut had such high wages.
Some California residents have expressed that as the cost of living rises, their financial pressures are increasing. Mary Smith, a customer service representative in Sacramento, told Epoch Times, “No matter how much money I make or how many hours I work, paying all the expenses is still a challenge.”
A Northern California resident expressed shock at these research findings, commenting that in California, people feel the need to earn high salaries just to barely make ends meet.
Juan Hernandez, a laborer from the East Bay, told Epoch Times on July 22nd, “I never thought there were so many people making this much money,” adding, “but considering the housing prices in the Bay Area, if you’re not a millionaire, you basically can’t afford a house.”
According to research by online real estate company Zillow, the average home price in the Bay Area is $1.2 million. Based on data from Redfin, in June 2024, the median sale price of homes in California reached nearly $860,000.