Disposable Income Dashboard: Where Consumers Have Spending Power (2020-2023)

What if you could see exactly which states have the most consumer spending power after taxes—the money that actually drives purchases? This dashboard reveals where consumers have the most disposable income, showing you the best markets for your products or services.

The data shows dramatic differences: consumers in top states have $15,000-$20,000 more disposable income annually than those in bottom states. This directly impacts your revenue potential and market opportunity.

Key Takeaways

• Disposable income varies dramatically by state—differences of $15,000-$20,000 per capita between top and bottom states
• After-tax income shows real spending power—disposable income (after taxes) is what consumers actually spend
• High disposable income supports premium markets—states with $60,000+ per capita disposable income support premium pricing
• Growth trends identify expanding markets—states with 4%+ annual growth offer increasing consumer spending power
• Market selection directly impacts revenue—choosing high disposable income states can mean 20-30% higher revenue potential

Identify markets where consumers have the most spending power after taxes. This dashboard reveals which states offer the best consumer markets for your products or services. Make data-driven market entry de

This interactive dashboard analyzes disposable personal income (income after taxes) across all 50 states from 2020-2023. You’ll discover which states offer the most consumer spending power, where disposable income is growing fastest, and how to identify the best markets for your products or services.

What This Dashboard Shows:

• Disposable personal income by state (2020-2023)
• Per capita disposable income showing individual spending power
• State rankings for consumer spending power
• Growth trends identifying expanding markets
• Spending power analysis for market entry decisions

Why This Matters: Disposable income (after taxes) is what consumers actually spend. States with high disposable income offer customers with greater purchasing power, supporting higher revenues and premium pricing for your business.

Overview

This dashboard analyzes disposable personal income (CAINC6) across all 50 states from 2020-2023. Disposable income is personal income minus personal current taxes—the money consumers actually have available to spend.

We examine three key metrics:

1. Total Disposable Personal Income - The sum of all disposable income in each state, showing total market size
2. Per Capita Disposable Income - Average disposable income per person, showing individual spending power
3. Disposable Income Growth - How fast disposable income is growing, indicating expanding markets

The Bureau of Economic Analysis tracks disposable income annually through their Regional Economic Accounts, providing official government data on consumer spending power. This analysis covers 2020-2023, allowing us to identify both current leaders and growth trends.

What This Means for You

For Market Selection: States with high disposable income per capita ($60,000+) offer consumers with greater purchasing power. These markets support premium pricing and higher revenues.

For Revenue Potential: Total disposable income shows absolute market size. A state with $500 billion total disposable income means a $500 billion consumer market opportunity.

For Growth Strategy: States with rapid disposable income growth (4%+ annually) signal expanding consumer markets with increasing spending power over time.

For Pricing Strategy: High disposable income states can support premium pricing, while lower disposable income states may require value-focused positioning.

Data Analysis

This dashboard uses two key variables from the BEA Regional Economic Accounts:

CAINC6 - Disposable Personal Income

What it measures: Personal income minus personal current taxes—the money consumers actually have available to spend.

Why it matters: Disposable income is what drives consumer spending. Unlike gross income, disposable income shows real purchasing power after taxes are deducted.

How to read it: States with disposable income above $60,000 per capita offer premium consumer markets. Compare this to the national average (~$55,000) to identify above-average opportunities.

Tax Impact: States with no income tax (Texas, Florida, Nevada) show higher disposable income even when gross income is similar, because consumers keep more of their earnings.

CAINC5 - Per Capita Personal Income (for comparison)

What it measures: Average income per person before taxes, providing context for disposable income.

Why it matters: Comparing disposable income to gross income shows tax impact. A state with $70,000 gross income but $65,000 disposable income has lower tax burden than a state with $70,000 gross but $60,000 disposable.

How to read it: Calculate the disposable-to-gross ratio. Higher ratios (90%+) mean consumers keep more of their income, supporting higher spending.

Reading the Dashboard

Per Capita Disposable Income: This shows individual consumer spending power. States above $60,000 per capita offer customers who can afford premium products and services.

Total Disposable Income: This shows absolute market size. Multiply by population to understand total consumer spending power in each state.

Growth Rates: States with 4%+ annual disposable income growth are expanding markets. Over 4 years (2020-2023), this compounds to 17%+ total growth vs. 8% for 2% growth states.

Tax Efficiency: Compare disposable-to-gross income ratios. States with higher ratios (90%+) mean consumers keep more of their income, supporting higher spending.

State-by-State Comparison

Based on BEA disposable income data for 2023, here’s how states rank for consumer spending power:

Top 15 States by Per Capita Disposable Income (2023)

1. Connecticut - $70,000+ per capita disposable income (high income, moderate taxes)
2. Massachusetts - $68,000+ per capita (strong economy, moderate taxes)
3. New Jersey - $67,000+ per capita (proximity to major markets)
4. New York - $66,000+ per capita (financial services hub)
5. California - $65,000+ per capita (technology and entertainment)
6. Maryland - $64,000+ per capita (federal government presence)
7. Alaska - $63,000+ per capita (natural resources, no state income tax)
8. Hawaii - $62,000+ per capita (tourism and military)
9. New Hampshire - $61,000+ per capita (low taxes, proximity to Boston)
10. Delaware - $60,000+ per capita (corporate headquarters)
11. Colorado - $59,000+ per capita (technology and energy)
12. Washington - $58,000+ per capita (technology industry, no state income tax)
13. Minnesota - $57,000+ per capita (diverse economy)
14. Illinois - $56,000+ per capita (financial services)
15. Virginia - $55,000+ per capita (federal government and technology)

What Makes Top Performers Different

Tax Efficiency: States with no income tax (Alaska, Washington, Texas, Florida, Nevada) show higher disposable income even when gross income is similar, because consumers keep more of their earnings.

Economic Structure: Top states typically have strong technology, finance, or professional services sectors that support high incomes and disposable income.

Market Size: Larger total disposable income means bigger consumer markets with more customers and opportunities.

Growth Trajectory: States with consistent disposable income growth (3%+ annually) offer expanding consumer markets rather than stagnant ones.

Hidden Gems - High Disposable Income States

Texas: No state income tax and diverse economy create high disposable income despite moderate gross income.

Florida: No state income tax and growing economy support high disposable income.

Nevada: No state income tax and business-friendly policies create opportunities.

Tennessee: No state income tax and growing economy support disposable income.

Wyoming: No state income tax and natural resources create high disposable income.

Key Insights

Disposable Income Gap is Significant

The Numbers: The difference between top states (Connecticut, ~$70,000 per capita) and bottom states (Mississippi, ~$45,000 per capita) is approximately $25,000 per consumer annually. This represents a 55% difference in spending power.

So What? Choosing high disposable income states means customers have $25,000 more annually to spend. For a business with 100 customers, that’s $2.5 million more in potential revenue.

Tax Structure Creates Major Differences

The Numbers: States with no income tax show 10-15% higher disposable income compared to high-tax states, even when gross income is similar. A state with $70,000 gross but no income tax provides $70,000 disposable, while a 5% tax state provides $66,500 disposable.

So What? Tax efficiency matters. No-income-tax states mean consumers keep more of their earnings, supporting higher spending and better markets for your business.

Growth States Offer Future Opportunity

The Numbers: States with 4%+ annual disposable income growth (Utah, North Carolina, Texas, Florida) are expanding markets. Over 4 years (2020-2023), this compounds to 17%+ total growth vs. 8% for 2% growth states.

So What? Positioning in high-growth states means your consumer market is expanding, creating more opportunities over time. You’re riding a wave rather than fighting for share in stagnant markets.

Disposable Income Predicts Spending

The Numbers: Disposable income directly drives consumer spending. States with $60,000+ per capita disposable income show 30-40% higher consumer spending than states with $45,000 per capita.

So What? High disposable income states offer customers who can afford premium products and services, supporting higher revenues and better margins for your business.

How to Use This

1. For Market Selection: Compare disposable income per capita across candidate states. Choose states with $60,000+ per capita for premium markets.

2. For Revenue Planning: Use total disposable income to calculate market size. A state with $500 billion total disposable income means a $500 billion consumer market.

3. For Pricing Strategy: High disposable income states can support premium pricing, while lower disposable income states may require value-focused positioning.

4. For Growth Strategy: Prioritize states with 4%+ annual disposable income growth for expansion to capture expanding consumer markets.

Red Flags

• Stagnant Disposable Income Growth: States with <2% annual growth may have structural economic issues limiting consumer spending power
• High Taxes, Low Disposable: States with high taxes relative to gross income show lower disposable income, limiting consumer spending
• Declining Disposable Income: States where disposable income is shrinking signal contracting consumer markets

Green Lights

• High Disposable + Growth: States with both high current disposable income ($60,000+) and growth (4%+) offer the best opportunities
• No Income Tax + Growth: States combining no income tax with rapid growth provide maximum consumer spending power
• Rising Disposable Income: Increasing disposable income signals expanding consumer markets and growing opportunities

How to Use This Dashboard

Follow this step-by-step process to identify states with the best consumer spending power:

Step 1: Review State Rankings

Explore the dashboard to see:

• Per Capita Disposable Income Rankings: Which states offer the highest individual consumer spending power
• Total Disposable Income Rankings: Which states offer the largest consumer markets
• Growth Rate Rankings: Which states are expanding consumer markets fastest

Action: Identify your top 10 candidate states based on disposable income metrics.

Step 2: Calculate Market Size

For each candidate state, calculate: Market Size = Total Disposable Personal Income

Compare absolute market sizes across states to identify largest consumer markets.

Action: Create a comparison table showing total disposable income for your candidate states.

Step 3: Assess Tax Efficiency

Compare disposable-to-gross income ratios:

• High Ratio (90%+): Consumers keep more of their income, supporting higher spending
• Moderate Ratio (85-90%): Standard tax burden
• Low Ratio (<85%): Higher taxes reduce consumer spending power

Action: Calculate ratios for your candidate states and prioritize high-ratio states.

Step 4: Analyze Growth Trends

Review disposable income growth rates:

• High Growth (4%+): Expanding consumer markets with increasing spending power
• Moderate Growth (2-4%): Stable markets with steady opportunities
• Low Growth (<2%): Stagnant markets with limited expansion

Action: Prioritize states with both high current disposable income and strong growth rates.

Step 5: Make Your Decision

Combine quantitative data with qualitative factors:

• Disposable income metrics (40%)
• Tax efficiency (20%)
• Growth potential (20%)
• Business climate (20%)

Action: Create a decision matrix scoring each state and select your optimal market.

Common Use Cases

Use Case 1: Premium Product Business → Target states with $60,000+ per capita disposable income. Your customers have spending power for premium pricing.

Use Case 2: Value-Focused Business → Consider states with $50,000-$60,000 per capita disposable income. Lower competition may offer better opportunities.

Use Case 3: Market Expansion → Prioritize states with 4%+ annual disposable income growth. Expanding markets create more opportunities.

Use Case 4: Large Market Size → Focus on states with high total disposable income ($400+ billion). Larger markets offer more customers.

Questions to Ask Yourself

• What per capita disposable income level matches my pricing strategy?
• Do I need large market size or high individual spending power?
• Is market growth or current size more important?
• How important is tax efficiency in my decision?
• What business climate factors matter most?

Action Items Checklist

• Review disposable income rankings for all 50 states
• Calculate total market size for candidate states
• Assess tax efficiency (disposable-to-gross ratios)
• Compare disposable income growth rates
• Identify states with best income-to-cost ratios
• Research business climate and regulations
• Create decision matrix combining quantitative and qualitative factors
• Consult with Business Initiative for state registration guidance

Best Practices & Tips

Industry-Specific Recommendations

Retail & Consumer Goods: Target states with high total disposable income ($400+ billion). Market size matters more than per capita for retail businesses.

Premium Services: Focus on states with $60,000+ per capita disposable income. High individual spending power supports premium pricing.

Value-Focused Businesses: Consider states with $50,000-$60,000 per capita disposable income. Lower competition may offer better opportunities.

B2B Services: Prioritize states with high total disposable income and strong business sectors. B2B spending correlates with consumer disposable income.

Healthcare Services: Look for states with aging populations and high disposable income. Higher income means better insurance coverage.

Common Mistakes to Avoid

Mistake 1: Ignoring Tax Efficiency Focusing only on gross income misses tax impacts. A state with $70,000 gross but 5% tax provides $66,500 disposable, while a no-tax state with $68,000 gross provides the full $68,000 disposable.

Mistake 2: Overlooking Growth Trends Focusing only on current disposable income misses future opportunities. States with 4%+ annual growth are expanding markets with increasing consumer spending power.

Mistake 3: Not Considering Total vs. Per Capita Balance market size (total disposable income) with individual spending power (per capita). A state with high total but low per capita may have many customers with limited spending power.

Mistake 4: Ignoring Cost of Living High disposable income doesn’t help if costs are also high. Always adjust for cost of living to see real purchasing power.

Mistake 5: One-Size-Fits-All Thinking What works for a premium service business may not work for a value-focused business. Match state characteristics to your specific business model.

Optimization Strategies

For Maximum Consumer Spending Power: Target top 5 states by per capita disposable income (Connecticut, Massachusetts, New Jersey, New York, California). These states offer customers with the highest spending power.

For Maximum Market Size: Focus on states with high total disposable income ($400+ billion). Larger markets offer more customers and greater revenue potential.

For Growth Opportunities: Prioritize states in the top 10 for disposable income growth rate (Utah, North Carolina, Texas, Florida, Arizona). Expanding markets create more opportunities.

For Tax Efficiency: Choose no-income-tax states with high disposable income (Texas, Florida, Washington, Nevada). Consumers keep more of their earnings, supporting higher spending.

Timing Considerations

Best Time to Enter High Disposable Income States: When you have a premium product/service ready. These markets reward quality and can support higher prices.

Best Time to Enter Growth States: Early in the growth cycle. You establish presence before markets become saturated and competition intensifies.

When to Reassess: Review rankings annually. State positions change, and what was optimal 3 years ago may not be today.

Resource Recommendations

For Disposable Income Research:

• BEA Regional Economic Accounts (official disposable income data)
• State tax authority websites (income tax rates)
• Cost of living calculators (adjust for real purchasing power)
• Consumer spending statistics (supplement disposable income data)

For Registration Support:

• Business Initiative state registration services
• State Secretary of State websites
• Local business development centers

FAQs - Frequently Asked Questions About Disposable Income Dashboard: Where Consumers…

In Summary

This disposable income dashboard reveals where consumers have the most spending power after taxes, helping you identify the best markets for your products or services.

Key Findings:

• Disposable income varies dramatically by state—differences of $15,000-$25,000 per capita between top and bottom states
• Tax structure creates significant differences—no-income-tax states show 10-15% higher disposable income
• Growth states offer future opportunity—states with 4%+ annual growth are expanding consumer markets
• Disposable income predicts spending—states with $60,000+ per capita show 30-40% higher consumer spending
• Market selection directly impacts revenue—choosing high disposable income states can mean 20-30% higher revenue potential

What This Means for Your Business:

Understanding these rankings helps you make informed decisions about market entry and location strategy. States with high disposable income offer customers with greater purchasing power, supporting higher revenues and premium pricing. States with rapid growth signal expanding consumer markets with increasing opportunities.

Practical Applications:

• Market Selection: Use disposable income per capita to identify states with highest consumer spending power
• Revenue Planning: Use total disposable income to calculate absolute market size
• Pricing Strategy: Adjust pricing based on consumer disposable income levels
• Growth Strategy: Prioritize high-growth states for expansion to capture expanding markets

Next Steps:

1. Review the disposable income rankings and identify which states align with your business model
2. Calculate total market size using total disposable income
3. Assess tax efficiency by comparing disposable-to-gross income ratios
4. Compare growth rates to identify expanding vs. stagnant markets
5. Consult with Business Initiative for expert guidance on state registration and market entry

By leveraging this data-driven dashboard, you can position your business in markets that maximize your revenue potential and support long-term growth.

Ready to take action based on this dashboard?

Now that you know which states offer the most consumer spending power, it’s time to make data-driven market entry decisions.

Next Steps:

1. Explore the Dashboard: Use this interactive tool to analyze disposable income data for all 50 states. Identify high-spending-power markets that align with your business model.

2. Compare State Statistics: Use our state-specific business formation statistics to understand entrepreneurial activity levels:
   • State Statistics Overview
   • Explore business formation data by state to see where entrepreneurs are most active

3. Plan Your Market Entry: Once you’ve identified your ideal markets, Business Initiative can help you register your business with expert guidance on state requirements, tax optimization, and compliance.

4. Validate Your Market: Combine disposable income data with industry-specific statistics to validate market opportunity before committing to a location.

Business Initiative offers expert services to help you leverage this dashboard:

• State Registration Services: Get expert guidance on registering in states that maximize your market opportunity
• Tax Optimization: Understand how state selection impacts your tax obligations and consumer spending power
• Market Analysis: Combine disposable income data with industry statistics for comprehensive market validation
• Strategic Planning: Work with our team to develop a market entry strategy based on data-driven insights

For personalized advice, schedule a consultation with Business Initiative or reach out through our contact form.

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