How much does Texas' top 1% pay in taxes? Study says state has 4th highest payments in US

The top 1% of earners pay millions in taxes each year — even in the Lone Star State, which doesn't have a state income tax.

Financial technology company SmartAsset analyzed the most recent data available through the Internal Revenue Service to compare taxes paid by the top 1% of earners in each state. The data reflects numbers from 2021 personal income tax returns.

Texas is one of nine states that doesn't have a personal income tax. The collection of income taxes is forbidden by the Texas constitution; instead, the state relies on high property, sales and use taxes. The absence of a personal income tax has made the Lone Star State desirable for large companies such as Chevron and Tesla for headquarters.

However, even the top 1% earners in Texas like Elon Musk, CEO of Tesla Motors and X, must pay some form of taxes to sustain the economy. How do these earners compare to those in other states? Here's what the data shows.

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Top 1% in Texas has 4th highest tax payments

The recent SmartAsset study reveals the top 1% of earners in Texas make the fourth highest tax payments among U.S. states.

In 2021, over 126,000 Texans who filed tax returns were considered to be the top 1% of earners. This group paid $81,417,526 in total income taxes that year, at an average rate of 26%. In all, this amounted to 46.7% of the total income taxes paid in the state.

The top ten states with the highest tax payments by the top 1% are as follows:

1. California : $165,087,786
2. New York : $99,157,333
3. Florida : $91,942,807
4. Texas : $81,417,526
5. Illinois : $40,234,949
6. Massachusetts : $35,931,120
7. Pennsylvania : $31,046,021
8. New Jersey : $30,615,181
9. Washington : $27,320,236
10. Georgia : $24,761,176

Top 1% in Texas has 8th largest portion of income tax base

Nearly half (46.7%) of the income tax base in Texas comes from the top 1% of earners. This is the eighth-largest share of the base compared to those in other states.

Here are the top ten states with the largest portions of their income tax bases:

1. Wyoming : 61.7%
2. Nevada : 56.4%
3. Florida : 55.2%
4. New York : 52.8%
5. Arkansas : 50.7%
6. Connecticut : 49.4%
7. Utah : 47.3%
8. Texas : 46.7%
9. California : 45.8%
10. Massachusetts : 45.8%

Texas has 8th highest effective tax rates

The Lone Star State also ranked eighth among U.S. states for the highest effective tax rates. The top 1% of earners in Texas pay an average of 26.01%, compared to 14.6% for all Texas taxpayers.

The national average for tax rates among the top 1% of earners is 25.95%, according to SmartAsset. In 2021, this added to about $993.7 billion in income taxes.

Here are the top 11 states with the highest effective tax rates paid by the top 1% of earners. This group averaged 26.0% in four states, including Texas.

1. Connecticut : 27.7%
2. New York : 27.3%
3. California : 27.2%
4. New Jersey : 27.2%
5. New Hampshire : 26.7%
6. Massachusetts : 26.6%
7. Delaware : 26.2%
8. Texas : 26.0%
9. Illinois : 26.0%
10. Pennsylvania : 26.0%
11. Virginia : 26.0%

This article originally appeared on Austin American-Statesman: How much does Texas' top 1% pay in taxes? Study says state has 4th highest payments in US