Four years ago Jay-Z issued a lyrical taunt to his fellow rappers: "What you call money, I pay more in taxes." Turns out his line was more than just a boast.
Jay-Z pulled in $63 million over the past 12 months, earning him his second straight hip-hop cash crown. His income level places him in the 35% tax bracket, which means he'll pay Uncle Sam about $22 million this year--a sum greater than the total earnings of any other rap star besides second-ranked Diddy.
"Jay-Z is in a league of his own right now," says Ryan Schinman, chief of Platinum Rye, the country's largest buyer of music and talent for corporations. "There are very few artists of any genre, not just hip-hop, who've created such brands for themselves."
The top 20 earners on this year's Cash Kings list racked up about $300 million in earnings, an average of $15 million per artist. Remarkably, the total is roughly the same as last year, despite a troubled economy and a music industry thrown into flux by new technology.
"There aren't many artists selling 250,000 albums in the opening week, and that used to happen all the time," says entertainment attorney Donald David. "The rise of iTunes means people don't have to buy whole album ... and that has changed the business dramatically."
Jay-Z and Diddy are two artists who've taken the changes in stride. In addition to releasing an album and launching a worldwide tour (average gross: more than $1 million per show), Jay-Z co-owns the 40/40 nightclub chain and has a stake in the NBA's New Jersey Nets. Diddy continues to cash in on Diageo ( DEO - news - people ) vodka, Ciroc and roles in television and film, including this year's Get Him to The Greek. He also hawks Diddybeats ear-buds, part of the headphone line established by Dr. Dre, who ranks fifth on our list with $17 million.
Senegalese-American impresario Akon ranks third with $21 million, thanks to his Konvict Clothing label, a lucrative World Cup soccer ad campaign for Pepsi ( PEP - news - people ) and Kon Live, his Interscope-backed imprint that's home to Lady Gaga and others. Fourth on the list is Lil Wayne, who managed to pull in $20 million from his new album, Rebirth, and heavy touring before the start of his one-year jail stint in March for weapons charges. Ludacris ranks sixth with $16 million, a total fueled by movie roles and a new cognac line, Conjure.
"There's a lot of cross-branding and cross-marketing that's going on these days," notes Troy Marshall, vice president of promotions at Interscope Records. Along with touring, he says, "those are very important components for artists as far as spreading the message of their music and spreading the message of their brand."
Kanye West's earnings fell from $25 million last year to $12 million this year in the wake of his highly publicized outburst during Taylor Swift's acceptance speech at the 2009 Video Music Awards. With a new album and world tour in the offing, he should be back toward the top of next year's list along with 50 Cent, who took a break from touring and recording to concentrate on film roles over the past year, earning $8 million, a relatively paltry total for the 2008 Cash King.
Eleventh-ranked Drake is the highest-earning newcomer on the list. He banked $9 million over the past 12 months, thanks to a new record deal, an advertising pact with Sprite and an agreement with Virgin America that plasters his likeness onto the sides of airplanes. Another good decision: recruiting Lil Wayne and Jay-Z to appear on his debut album, Thank Me Later, which sold 447,000 copies in its first week.
Though Jay-Z earned more than Lil Wayne, Drake, Kanye West and 50 Cent combined, he's not even the richest musician in his own home--that honor goes to his wife, Beyoncé, who raked in $87 million over the past 12 months.
The Forbes Hip-Hop Cash Kings list includes male recording artists whose work is primarily classified as hip-hop or rap. Earnings estimates, which include income from record sales, digital downloads, touring, films, TV shows, endorsements, books and other entertainment ventures, are calculated between June 2009 and June 2010. Management, attorney and agent fees are not deducted.
In order to determine our list, we interviewed numerous sources within the music industry, including lawyers, media buyers, record label executives and many of the artists themselves. We also conducted research via Billboard, Pollstar, Nielsen SoundScan and the Recording Industry Association of America, among other sources.