The popular picture of the top 1% is a private jet and an inherited fortune. Public data and one New Orleans tax attorney’s book point somewhere else: a lower income line, a heavy tax share, a coming wave of inheritance and, for many owners, wealth that exists mostly on paper. Three myths, tested against the latest numbers.
By Dr. Tamara Patzer
October 12, 2026
Mention the wealthiest Americans and most people picture a yacht. New Orleans tax and estate attorney Todd M. Villarrubia says that picture is wrong in ways that matter to anyone who owns a company. His book, Entrepreneurial B.E.A.S.T. Mode™, begins by taking the popular myths apart. Three of them follow, each tested against the newest public numbers.
Do you need a private jet to be in the top 1%?
No. For tax year 2023, an adjusted gross income of about $676,000 was enough to reach the top 1% of filers, according to the Tax Foundation’s analysis of IRS data1. That is a high income. It is not a billionaire’s income.
Villarrubia makes the same point in his opening chapter: “However, the reality is that the threshold for being in the ‘top 1% of America’ is lower than many believe.” He adds that “Membership doesn’t require a Gulfstream; it simply requires having built or accumulated significant financial power.”
The practical risk is that owners who do not see themselves in this group do not plan like it. A founder can have a strong year, sell a building, take a bonus and cross the line without ever feeling rich. The tax and legal questions that come with the line arrive anyway.
Does the top 1% pay less than its share of tax?
By the numbers, no. The top 1% of filers paid about 38.4 percent of all federal individual income tax in tax year 20231. Whatever a reader thinks of the policy debate, the owner’s task is narrower: find out which of the lines below your own income touches.
In 2026 the 37 percent bracket applies to single filers with taxable income above $640,600 and to joint filers above $768,7002. Investment income can add a 3.8 percent Net Investment Income Tax once modified adjusted gross income passes $200,000 for single filers or $250,000 for joint filers3. Long-term capital gains are taxed at 0, 15 or 20 percent, and for 2025 the 20 percent rate began above $533,400 of taxable income for single filers4.
Those are federal figures. They say nothing about state tax, entity choice or timing, which is where Villarrubia spends most of his book. His argument is that how an owner holds assets, and when a sale happens, can matter as much as the headline rate.
Is the top 1% mostly inherited money?
Villarrubia argues in his book that the group is made up largely of people who built or accumulated wealth themselves rather than heirs of old fortunes. Whatever the mix is today, inheritance is about to become a much larger part of the story.
Cerulli Associates estimates that $124 trillion will change hands in the United States through 2048, with about $105 trillion going to heirs and $18 trillion to charity5. That is a transfer of ownership on a scale few families have faced. Villarrubia’s warning is about what happens after the paperwork: “Money changing hands means nothing if stewardship doesn’t change with it.”
His point is that an heir who receives assets without the reasons and methods behind them is more likely to lose them. A plan written for the parents but never explained to the children can look complete on paper and fail within a generation.
Do people in the top 1% feel rich?
Often they do not, and founders least of all. Villarrubia writes that “Most of their balance sheet is illiquid and concentrated in a single asset: their company.” Until a sale or another liquidity event, that value is a number in a valuation, not money in an account.
The gap between income and comfort shows up in the polling. Charles Schwab’s 2025 Modern Wealth Survey found that Americans, on average, say it takes $2.3 million in net worth to be wealthy6. The Federal Reserve’s 2025 Survey of Consumer Finances, released on October 9, 2026, put median family net worth at $215,900 and mean net worth at $1.24 million7. An owner whose fortune sits inside one private company can look rich on a valuation and still feel well short of the figure most people name.
That feeling has consequences. Owners who feel cash-poor tend to keep reinvesting in the one asset they already hold too much of. Villarrubia’s book treats that concentration as a risk to be planned around, not a badge of confidence.
What should an owner do with this?
Start by knowing your own numbers. Three questions are enough for a first pass:
- Where did your adjusted gross income land last year compared with the $676,000 line, and what would a sale do to it?
- How much of your net worth sits inside one company, and how soon could any of it be turned into cash?
- Who in your family understands why the plan exists, not only what it says?
On timing, Villarrubia is direct: “Advanced planning doesn’t begin at exit; it begins years before opportunity knocks.” Many protective steps cannot be added once a lawsuit, a sale or a death has already happened.
Where should an owner look next?
At the structure behind the numbers. A threshold tells you where the national line sits. It does not tell you how your assets are held, who can reach them or what happens if you cannot act. Those questions belong to an attorney and a tax professional who can see your whole picture. Bring a one-page list of your companies, accounts and advisers to the first meeting, and ask which item deserves attention first. That list, more than any statistic, is the practical start.
Common questions
Is the top 1% by income the same group as the top 1% by net worth? No1. Income is measured on a tax return for a single year, while net worth counts everything owned minus everything owed, so a household can be in one group and not the other.
Does an owner need a lawyer or an accountant first? Usually both, because the tax result and the legal structure affect each other. Villarrubia’s book argues that advisers who never speak to one another are a risk in their own right.
Do these numbers apply to every state? No. State income tax, state estate rules and local conditions differ, so a national threshold is a starting point, not a verdict.
Sources
- Tax Foundation, Who Pays Federal Income Taxes? Tax Year 2023
- Internal Revenue Service, tax inflation adjustments for tax year 2026
- Internal Revenue Service, Topic no. 559, Net Investment Income Tax
- Internal Revenue Service, Topic no. 409, Capital Gains and Losses
- NAPA-Net, Wealth Transfers Expected to Hit $124 Trillion Through 2048 (reporting Cerulli)
- Charles Schwab, 2025 Modern Wealth Survey (Business Wire)
- Federal Reserve Board, press release on the 2025 Survey of Consumer Finances
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™. Wealth Planning Law Group, 101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124. Phone: 504-982-8207; email: todd@lawealthplan.com; website: https://lawealthplan.com/?utm_source=newsanchored&utm_medium=us-reporter&utm_campaign=top-1pct
Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
