The U.S. added more than 400,000 new millionaires last year, with most of those concentrated on the coasts in high-tax, predominantly blue states.
According to the Phoenix Wealth and Affluent Monitor, by Phoenix Marketing International, there were a total of 7.2 million millionaire households in 2017 — up 6 percent from 2016. Phoenix defines millionaire households as those with $1 million or more in investible assets.
Of course, the most populous states had the most millionaires. But Phoenix also ranked states by millionaires per capita. For the seventh year in a row, Maryland ranked first with the highest number of millionaires per capita — with more than 1 in 12 households having $1 million or more.
New Jersey ranked second, also with just about 1 in 12 households being millionaires. Connecticut ranked third, followed by Hawaii, Alaska, Massachusetts and New Hampshire. California had the most millionaires in total — 885,000 — but it ranked 10th in terms of per capita.
Texas had the second highest number, with 566,000, followed by New York with 465,000.
David Thompson, managing director of Phoenix Affluent Market, said the state rankings show that wealth creation continues to be concentrated in big urban centers on the coasts — around New York, Boston, Washington and Los Angeles. Those states also tend to lean Democratic in their politics.
“Those metro areas will continue to generate and mint new millionaires,” he said.
Maryland has dominated the list for so long because of the growth in the Washington suburbs of government-related contractors, lobbyists and consultants, he said.
Yet the new tax law could shift the millionaire map in the coming years. While millionaires are currently clustered in high-tax, Democratic states, new limits on the deductibility of state and local taxes could drive more of the wealthy to lower tax states like Florida, Texas and Nevada.
“I do think we will see some migration, especially from the East Coast,” he said. “Those who may already have second homes in Florida and the South could move. I think that could accelerate.”
Multimillionaires did even better last year. The number of households worth $5 million or more surged 8 percent to 1.1 million. That was the fastest growth in six years.
“The rich are definitely getting richer and controlling more and more of the wealth,” Thompson said.
The main driver of all that added wealth was investing. He said the wealthy have “better access to the best investment vehicles and better access to the advice” on how to invest.