Summary of There's a Mind-Boggling Number of Rich People in America

Overview of There’s a Mind-Boggling Number of Rich People in America

In this Odd Lots episode, Tracy Alloway and Joe Weisenthal speak with economists Owen Zidar and Eric Zwick, authors of The Everywhere Millionaire, about a surprisingly underappreciated source of wealth in America: the huge population of wealthy private business owners. The conversation argues that U.S. inequality is not driven only by tech billionaires and public-company CEOs, but also by millions of pass-through business owners—especially in industries like auto dealerships, beer distribution, dentistry, medical practices, and other regional businesses that generate outsized profits and political influence.

Main Thesis

Rich Americans are far more numerous—and more ordinary—than commonly assumed

• The episode pushes back on the idea that “the rich” are mostly a tiny set of public-facing billionaires.
• Instead, there is a broad “fat layer” of wealthy Americans who own and operate private businesses.
• Many of these people are not inventors or Wall Street titans; they often built wealth through:
  • regional distribution businesses
  • franchises
  • car dealerships
  • medical/dental practices
  • founder-led service businesses

Pass-through businesses are central to this story

• Pass-through entities (like S-corporations and partnerships) do not pay the corporate income tax the way C-corporations do.
• Profits “pass through” to owners, who are taxed at the individual level.
• These structures became much more attractive after tax changes in the 1980s and especially after the 2017 Trump tax reform.
• The result: pass-throughs now make up the majority of U.S. businesses and a large share of profits.

Key Findings from the Book and Research

Tax data reveals a very different picture of wealth

• Zidar and Zwick began with a Treasury Department project to link IRS business and owner data.
• Building the dataset required stitching together fragmented government databases that were never designed to communicate with one another.
• Their work showed that the media’s billionaire-focused view of wealth misses a huge part of the real distribution.

Pass-through income is extremely concentrated

• Roughly 70% of every dollar of pass-through business income goes to the top 1%.
• More than half of the rise in top 1% income share since the 1980s is explained by pass-through business income.

Wealth creation is often active, not passive

• A major challenge to the standard Piketty-style story is that much of this wealth is not just passive capital gains.
• Instead, it comes from owners actively running businesses that:
  • have local market power
  • benefit from regulation
  • rely on expertise and reputation
  • generate recurring profits through financing, warranties, services, and distribution

Illustrative Examples

Auto dealers

• Car dealerships are one of the biggest sources of pass-through income among the top 0.1%.
• The hosts highlight ultra-wealthy dealership families, including the Brockway family, who staged an extravagant wedding after selling their Mercedes dealership.
• Dealerships can generate enormous wealth through:
  • local monopoly protections
  • franchise restrictions
  • financing and warranty markups
  • ancillary services beyond the car sale itself

Beer distributors

• Beer distribution is another highly lucrative middleman industry.
• State-level regulations and post-Prohibition structures help protect distributors.
• These businesses often become huge and can accumulate significant wealth, yachts, jets, and political influence.

Dentists and doctors

• Dental and medical practices are heavily represented among top pass-through earners.
• The episode notes that aggregate dental revenue exceeds major professional sports leagues.
• Many doctors and dentists use S-corps to reduce payroll and Medicare tax exposure.
• The structure creates a big tax gap between:
  • salaried professionals
  • private-practice owners who can route income through a business entity

Founders and operators with long time horizons

• The episode emphasizes that many wealthy owners are not “born rich”:
  • Dick Portillo, who built a hot-dog empire from the Cabrini-Green projects
  • Larry Miller, who rose from auto parts work to become a major dealership owner and Utah Jazz owner
  • the “quiche lady,” who spent years in a fragile business before it became highly profitable
• A recurring theme is patience: many of these fortunes are built over decades, not by rapid Silicon Valley-style scaling.

Tax Policy and Political Implications

The tax code strongly favors some business owners

• The podcast explains how two people doing similar work can be taxed very differently depending on whether they are salaried employees or business owners.
• Pass-through owners can:
  • avoid corporate tax
  • reduce payroll tax liability
  • sometimes sidestep parts of Medicare tax and state/local tax limits
• The episode suggests that “small business” rhetoric often obscures the fact that many beneficiaries are large, highly profitable firms.

Small-business language makes reform politically hard

• The hosts note that tax loopholes persist partly because Americans like the idea of protecting small business.
• In practice, many pass-through beneficiaries are not small at all.
• A potential reform discussed is to phase out deductions or benefits above certain income thresholds.

Politicians are often pass-through owners too

• One reason loopholes endure: many elected officials are themselves business owners.
• The episode argues that this helps explain why tax reform on pass-throughs is so politically difficult.

Broader Takeaways

Inequality is shaped by many private businesses, not just tech wealth

• The episode’s central corrective is that U.S. wealth concentration is broader and more embedded in everyday industries than people realize.
• Richness often comes from:
  • local market dominance
  • service markups
  • regulatory barriers
  • founder control
  • business ownership rather than passive stock ownership

Geography and culture matter

• Entrepreneurial ecosystems appear to be regional and cultural, not just financial.
• The authors cite evidence that people in entrepreneurial regions—like Salt Lake City—are more likely to start successful businesses.
• Children of business owners are also more likely to start businesses themselves.

Private equity is deeply connected to this ecosystem

• PE firms often buy founder-owned businesses in unglamorous sectors:
  • plumbing
  • cabinets
  • pest control
  • treatment facilities
  • regional manufacturers
• Search funds and mini-buyouts are presented as one pathway for acquiring and scaling these businesses.

Notable Lines and Ideas

“Piketty with people”

• The authors describe their book as a more human version of capital-and-inequality analysis.
• Instead of abstract capital accumulation, they focus on real business owners and how they operate.

“Move slow and make things”

• A counterpoint to Silicon Valley’s “move fast and break things.”
• Many business fortunes are built through long-term operational discipline, not disruptive speed.

“Everybody’s got teeth”

• A memorable joke about why dental practices can be so profitable.
• It captures the broad, recurring demand that can support wealth in ordinary-seeming industries.

Bottom Line

The episode argues that America’s rich are not just a tiny class of celebrity billionaires—they include a vast, under-discussed layer of private business owners whose wealth comes from tax-favored structures, regional market power, and long-run business ownership. The result is a more complicated picture of inequality, tax policy, and who really benefits from the U.S. economy.