Every tax season, and in the run-up to elections, a familiar argument resurfaces among politicians, commentators, and voters about whether the wealthy are paying enough tax. One side argues that they do not pay their fair share, and on the other, that taxing the rich would stifle economic growth.
We surveyed 3,031 Americans who earn more than $250,000 a year and asked them a simple question: whether their own income tax bill should be higher, lower, or stay the same. We also followed up with a list of questions to gauge their opinions on taxation for high-net-worth individuals.
The most staggering statistic was as follows: 32% of high earners believe that they should be paying more income tax. A number at odds with the general consensus as to what high earners believe. We also broke down the data by cities across the country.
| State | Percentage |
|---|
| Alabama | 31% |
| Alaska | 67% |
| Arizona | 37% |
| Arkansas | 30% |
| California | 24% |
| Colorado | 35% |
| Connecticut | 40% |
| Delaware | 35% |
| Florida | 30% |
| Georgia | 33% |
| Hawaii | 56% |
| Idaho | 38% |
| Illinois | 35% |
| Indiana | 22% |
| Iowa | 30% |
| Kansas | 18% |
| Kentucky | 42% |
| Louisiana | 38% |
| Maine | 27% |
| Maryland | 49% |
| Massachusetts | 33% |
| Michigan | 26% |
| Minnesota | 15% |
| Mississippi | 47% |
| Missouri | 29% |
| Montana | 25% |
| Nebraska | 36% |
| Nevada | 44% |
| New Hampshire | 25% |
| New Jersey | 39% |
| New Mexico | 31% |
| New York | 38% |
| North Carolina | 39% |
| North Dakota | 32% |
| Ohio | 30% |
| Oklahoma | 24% |
| Oregon | 28% |
| Pennsylvania | 21% |
| Rhode Island | 39% |
| South Carolina | 23% |
| South Dakota | 38% |
| Tennessee | 32% |
| Texas | 33% |
| Utah | 24% |
| Vermont | 32% |
| Virginia | 35% |
| Washington | 35% |
| West Virginia | 23% |
| Wisconsin | 24% |
| Wyoming | 57% |
Key Findings
Wealthy individuals living in suburbs are willing to pay more income tax.
In fact, 6 out of the top 10 locations where the wealthy believe they should be paying more income tax are suburbs within big cities. These include Riverview, Florida, in first place, followed by Sandy Springs, Georgia; Plano, Texas; and Cary, North Carolina. In fact, only three large cities make the top 10: Houston in 3rd, Chicago in 4th, and Atlanta in 7th.
The wealthy in Southern cities are overrepresented.
We found that 15 of the top 25 cities are in Southern states. This compares to the Northeast, which has six, and the Midwest, which has three. California, which has the highest number of millionaires in the country, is represented just once in the top 25: San Diego in 11th place.
More specifically, Texas cities are overrepresented.
The Lone Star State has two cities in the top five, Houston (3rd) and Plano (5th), and Dallas also makes the top 25. Interestingly, Austin, usually thought of as a progressive city in a deeply conservative state, is the lowest of the five largest Texas cities, ranking outside the top 60 and behind both San Antonio and Fort Worth.
California, with the highest income tax rate in the country, is poorly represented.
San Diego is the only California city listed in the top 25. The Bay Area doesn't show up until Oakland, outside the top 60. San Francisco doesn't appear at all, and Berkeley, of all places, sits in the bottom tier.
States that have no income taxes have higher representation in the study.
It is no coincidence that having no state income tax seems to correlate with wanting to contribute more. Alaska, Wyoming, Florida, Texas, and Tennessee do not levy income taxes, which between them account for four of the top 15 cities (Riverview, Plano, Houston, and Franklin).
Voluntarily paying more income tax would come with strings attached.
When asked what would make them most willing to pay more, the most common answer was clear evidence that the money would be spent effectively (28%).
Income tax mostly goes to the level of government they trust least.
Over half of wealthy respondents surveyed think the federal government is the least trustworthy steward of extra revenue, compared with 28% for state government and 19% for local.
They would want their extra tax contributions to go to progressive causes.
Healthcare (20%), schools and education (17%), affordable housing and homelessness services (15%), and support for older people and people with disabilities (13%) account for 65% of responses between them.
Final Thoughts
At first glance, the main takeaway from our study is the headline figure that 32% of high earners believe they should be paying more tax, but under certain conditions. However, those opinions vary considerably depending on location.
The cities where high earners are the keenest to pay more are arguably not those that you would expect. They are led by comfortable suburbs in Southern states, alongside big cities such as Houston, Chicago, and Atlanta. Most of California, including the Bay Area, appears much further down the list.
However, one thing is consistent across the board. If high earners are to incur higher income taxes, they want a say in what happens when it is paid. High earners want proof the money is well spent; they want it spent close to home, and they have little faith in Washington to deliver either.
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