Is Your Income Higher Now Than 10 Years Ago? It Depends On Where You Live

Where you reside has had a major impact on the relative change in prosperity families experience as reflected in the income reported on federal 1040 income tax returns. Using the latest figures reported by the Internal Revenue Service, and comparing these to returns filed a decade earlier, some counties saw a doubling of average adjusted gross incomes while taxpayers in other counties experienced declines.

For the U.S. as a whole, the average adjusted gross income (AGI) reported on a return grew by $16,735, from $55,361 for returns filed during 2008 to $72,096 for those filed in 2018[1]. This translates into a growth rate, not adjusting for inflation, of 30.2 percent.

Individual counties, however, often experienced quite different changes during this same period. The range in dollar change in a county's respective AGI was as high as $123,096 all the way down to a decline in AGI of -$71,059. In fact, 69 out of the 3,146 counties in the nation experienced a decline in reported AGI. The change in percentage terms in AGI ranged from a low of -93.7 percent to an increase of 290.4 percent and is displayed in the U.S. county map shown in Figure 1. Darker colors represent greater increases in AGI. Counties with decreases or largely stagnant AGI are shown in off-white.

Figure 1. County Level Change in Reported Income from 2008 to 2018
(Click for larger image)

Surprisingly, the map in Figure 1 shows that the geographic region of Appalachia, which extends from Southeast Ohio and West Virginia south into Kentucky and Tennessee, saw gains in AGI, as did parts of Mississippi-two areas of the country with historically high levels of poverty. The Great Plains states of Oklahoma, Kansas, Nebraska, and eastern Colorado, as well as most of Wyoming, however, saw stagnation or considerable decline.

The county with the largest increase in percentage terms was Dixie County, Florida on the Gulf Coast in the northern part of the state where average reported AGI increased from $26,439 on returns filed in 2008 to $103,222 for those filed in 2018 - up 290 percent. But most of this growth was a one-time jump from $37,879 in 2017 to over $100,000 the following year. This increase in prosperity was not shared by those dependent upon wages and salaries. For these families, the average reported wage/salary income in 2018 was just $26,456 - only about a quarter of the AGI for taxpayers in that county when sources of business and investment income were included.

The county which had the largest dollar gain in AGI over the past decade was New York County (Manhattan) where AGI grew from $103,050 to $226,146 between filing years 2008 and 2018 (up 119.5%). This dollar increase was closely mirrored by Teton County, Wyoming, which in 2018 had the highest AGI among all counties in the country. Teton County experienced an increase in AGI of $122,767 (up 86.4%) over the previous 10 years. Figure 2 contrasts the 50 counties with the largest percentage increase in AGI with the 50 counties with the largest percentage declines in AGIs. (A list of these counties with their corresponding statistics and ranking are shown in Table 1 at the end of this report.)

Figure 2. 50 Counties with Highest and Lowest Reported Income Growth, 2008-2018
(Click for larger image)

National, State and County Statistics on Income Reported on Federal Tax Returns

TRAC has updated its interactive Taxpayer Returns application with the latest available statistics on income and exemptions reported on federal 1040 income tax returns. This unique tool makes it easy to browse through TRAC's extensive store of information covering the last quarter century on the constantly shifting types of income that flow to taxpayers in the fifty states and every one of the more than 3,000 counties.

Top and Bottom Counties

Here are some of the types of results you can get by using the "Top and Bottom 50 Only" option to rank counties according to the latest tax data available for filing year 2018:

• Exemptions: When it comes to exemptions claimed per return, Jefferson County (Rigby) in Idaho is number one in the country, with 2.55. It is followed by Oglala Lakota County (Pine Ridge) in South Dakota (2.52), Gaines County (Seminole) in Texas (2.52), and Duchesne County (Roosevelt) in Utah all tied at 2.52. At the other extreme is San Juan County (Silverton) in Colorado with just 1.51 exemptions claimed per return. It is followed by New York County (Manhattan) in New York (1.52). Suffolk County (Boston) in Massachusetts along with Washington, D.C. are next, both tied at 1.55.

• Wages and Salaries: New York County (Manhattan) in New York reported the highest average wages and salaries of $118,326, up from $96,941 five years ago. At the other end is Catron County (Glenwood) in New Mexico with average wages and salaries of only $16,361 just barely above its average of $16,280 in 2013.

• Dividend Income: Teton County (Moose) in Wyoming reported the highest average dividend income with $41,131. At the bottom of the rankings was Oglala Lakota County (Pine Ridge) in South Dakota with an overage of only $7.

• Adjusted Gross Income: When all income sources are combined, Teton County (Moose) in Wyoming, mentioned earlier, again topped the list with an average of $264,815 in adjusted gross income reported, while Rockwall County (Dallas Metropolitan Statistical Area) in Texas came in last with just $4,812. It's particularly low average AGI was due to a relatively small proportion of returns that had very large business-related losses.

State Rankings

• In addition to county listings, states can also be ranked by the same measures. Here are a few state results:

• The highest average number of exemptions was claimed on returns filed in Utah, Idaho and Texas, in that order. The District of Columbia, Vermont and Rhode Island took the lowest three spots.

• The top three states in terms of average wages and salaries were the District of Columbia, Connecticut, and Massachusetts, respectively. The lowest figures were reported for New Mexico, Mississippi, and Montana.

• The highest average dividend income was reported in Wyoming, Connecticut and Arkansas, in that order. At the other end, the lowest dividend income was reported in Mississippi, West Virginia and Alabama.

• The highest average adjusted gross income was recorded in Connecticut, District of Columbia, and Massachusetts. At the bottom of the list were Mississippi, West Virginia, and New Mexico.

County Data from A to Z

• Abbeville County (Abbeville) in South Carolina ranked 27th in the state and in the bottom quarter (76th percentile) nationally in terms of average adjusted gross income, while Acadia Parish (Crowley) in Louisiana ranked 46th in the state and towards the bottom third (64th percentile) among all counties in the country.

• Ziebach County (Dupree) in South Dakota ranked 59th in the state and in the bottom two percent nationally among all counties on average adjusted gross income, while Zavala County (Batesville) in Texas ranked in the bottom three percent of all counties in the country and 247th in the state.

• The data reported on federal income tax returns - including adjusted gross income, wages and salaries earned, interest income, dividend income and exemptions claimed - provide unique views of the economic conditions of the country as a whole, as well as for each state and county over more than a quarter century. At the same time, the tax return information offers unusual insights about the sources of the income flowing from income taxes into the federal coffers.

Footnotes

^[1] These results are derived from analyses of the IRS data series, "County Income Data". The latest available figures cover income returns filed during 2018 reporting income received in 2017.