Sep 18, 2026 · 1h 8m
Listen from 1:05:25
Listen at 1:05:25
America’s hidden business owners reshape the wealth gap
There's a Mind-Boggling Number of Rich People in America
The episode shows how private business owners, tax structures, and inherited networks have expanded wealth and political influence beyond famous billionaires.
- 1Linked tax and business records identify roughly three million private-business millionaires averaging about $25 million in wealth.
- 2Pass-through structures, local monopolies, and professional practices channel substantial income to owners while worker compensation lags.
- 3Entrepreneurial networks and an impending ownership transfer make regional business wealth both inherited and newly investable.
Don't miss
The guests reveal that roughly three million private-business owners average about $25 million in wealth, recasting who counts as rich in America.
The brief
Economists Owen Zidar and Eric Zwick built a linked dataset from tax, ownership, and worker records, revealing roughly three million “Main Street Millionaires” averaging about $25 million in wealth.
Their findings shift the inequality debate toward pass-through businesses, where car dealers, beer distributors, doctors, dentists, and other owners can accumulate fortunes outside public-company headlines.
Local protections, scarce professional expertise, and decades of operational knowledge help ordinary-looking businesses generate extraordinary returns, while S-corp rules can reduce payroll and Medicare tax exposure.
The wealth is not only financial: growing up around entrepreneurs increases the likelihood of becoming an owner, making business success a regional and multigenerational process.
As older founders sell plumbing, HVAC, veterinary, dental, and other companies, private equity and new buyers are positioned to reshape who controls America’s local businesses.
What was said on this episode
27 statements · 17 positive · 4 negative · 1 mixed · 5 neutral
Many businesses framed as small are actually large and wealthy.
“a lot of these businesses are actually phenomenally large and very, very wealthy.”
Listen at 3:11
America has a large layer of very wealthy people beyond billionaires.
“We have a big fat layer of like just really rich people.”
Listen at 5:00
Pass-through entities comprise most American businesses and about half of profits.
“that's the vast majority of businesses in America and like half of profits.”
Listen at 13:45
The top 1% receive 70% of pass-through business income.
“70% of every dollar pass-through business income goes to the top 1%.”
Listen at 14:05
Pass-through income accounts for over half of income-inequality growth through 2021.
“more than half of the growth from that period of time to the, you know, 2021 is coming in the form of pass-through business income.”
Listen at 14:17
Auto dealers are the largest industry group among top pass-through earners.
“the top 0.1%, the auto dealers were the number one bucket”
Listen at 19:54
Geographic franchise rules give auto dealers local monopoly power.
“You have a local monopoly, sort of.”
Listen at 24:50
Dealership ancillary services have higher markups than car sales.
“the markups are much higher than on just the immediate sale of the car”
Listen at 25:10
Beer distributors are extremely wealthy intermediaries.
“These are incredibly wealthy businesses that sit between manufacturers and end users”
Listen at 26:33
Wealth inequality involves millions of active private business owners.
“it's actually more this like these millions of private business owners who are actively owning and operating businesses”
Listen at 28:55
Dick Portillo became a billionaire through his hot-dog business.
“he ended up over decades. selling a lot of hot dogs to become a billionaire”
Listen at 30:24
Owning multiple dental practices can produce substantial wealth.
“if you own eight dental practices, you can be really rich.”
Listen at 35:31
U.S. dentists generate more revenue than the major professional sports leagues combined.
“if you add up all the revenue of dentists in America, it exceeds... the revenue generated by the NFL, the NBA, MLB, basically all professional sports”
Listen at 35:51
Doctor’s offices rank first in pass-through profits among four-digit industries.
“Doctor's offices was number one.”
Listen at 36:41
Anesthesiologists routing income through S corporations can avoid payroll tax on profits.
“that anesthesiologist that runs most of the business through the S-Corp is not paying payroll tax.”
Listen at 41:21
About one-quarter of federal elected officials own pass-through businesses.
“a quarter of federal elected officials are also passed through business owners.”
Listen at 43:38
Only 20% of pass-through income comes from small businesses.
“only 20% of it is actually small business, according to an old treasury study.”
Listen at 46:14
More than half of typical private-equity pipeline deals involve founder-owned firms.
“more than half of the deal, the typical deals in the pipeline from private equity are going to be founder-generated firms”
Listen at 47:35
More than half of intergenerational wealth-transfer assets are business wealth.
“more than half of that is like in the form of business wealth”
Listen at 49:25
Average search-fund returns are in the low twenties percent.
“the average return is like low 20s”
Listen at 50:19
Growing up in Salt Lake City triples the chance of starting a top business versus Mississippi.
“Salt Lake, you can... probability you start a star business, meaning the top 10% of revenue or employment, is three times higher than if you grew up in Mississippi.”
Listen at 52:08
Pass-through businesses generated about 60% of business-sector growth over 25 years.
“more than half of it, like 60% of the growth over the last 25 years is coming in pass-through form.”
Listen at 55:17
Owners’ share of business value added rose from roughly 33–40% to 50%.
“The share that the owners are capturing of the pie has gone from like a third or 40% to like 50%.”
Listen at 55:29
The United States has 30% fewer doctors than the OECD average.
“we have 30% fewer doctors in the OECD average.”
Listen at 56:02
Rising inequality reflects both owners capturing more and overall economic growth.
“a material part is a bigger slice of the pie. And then also another big chunk is growing the pie. And both of those things are true.”
Listen at 57:38
Owners received $15,000 of an $18,000 per-worker value-added increase.
“Owners got 15 of that and workers got the rest.”
Listen at 59:43
Tax optimization and policy changes tend to push taxes downward over time.
“it seems like mostly it's a one-way ratchet. Taxes just keep going lower.”
Listen at 1:03:56
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
