This is an unprecedented concentration of wealth and power among the super-rich. When we talk about wealth, we mainly talk about billionaires. But what if that’s not the most important truth about wealth in America? What if there were another group that, without drawing much attention, had grown collectively thirteen times richer than the Forbes 400? And that was even more effective at using its financial-political clout? […]
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[…] As Owen Zidar and Eric Zwick show in their brilliant new study, “The Everywhere Millionaire: Who Is Really Rich in America and How They Got There” (Holt), the car dealer—Rabbit, or Buddy Garrity in “Friday Night Lights,” or Daniel LaRusso, the grownup Karate Kid, in “Cobra Kai”—is a true archetype of American wealth. Car dealer, beer-distribution magnate, partner in a medical practice or a law firm: these ordinary, ubiquitous business owners represent a collective prosperity at least as consequential as the ascendancy of the billionaire, only much less conspicuous. “In a sense,” Zidar and Zwick argue, “Main Street Millionaires are hiding in plain sight. The supermarket where you shop, the restaurant where you order a burger, and the convenience store where you buy gas, newspapers, and coffee may all be parts of huge chains that have made their founders very rich.”
Zidar and Zwick got onto this story through their work for the Treasury at the Office of Tax Analysis, which studies the impact of tax legislation, actual and prospective. The two young economists, from Berkeley and Harvard, respectively, were assigned the task of finding out how much tax business owners pay. That might sound straightforward—might, indeed, sound like the kind of thing the government should already know—but the tax code is complicated, and the I.R.S.’s various databases are thoroughly siloed and anonymized. To answer the question, they and another colleague set about finding who owned businesses, connecting those business records with individual taxpayers. It was a complicated process involving years of work, and they more than earned the endearingly nerdy, self-appointed nickname the Tax Ninjas. They discovered what comes close to being a new class in America, the “everywhere millionaire” of their title. There are a lot of them: nearly five million households with a net worth of at least five million dollars; more than two million decamillionaires, worth at least ten million; and around sixty-five thousand centimillionaires, worth a hundred million and up. The sheer mass of these numbers means that, in Zidar and Zwick’s words, in contemporary America, for all the fuss around billionaires, “these are the real rich.”
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Republicans in Congress wanted to cut taxes, and Democrats wanted to simplify the tax code. The outcome was the bipartisan Tax Reform Act of 1986, which did both. In the process, the bill introduced a novelty in American history by leaving the top rate of corporation tax, thirty-four per cent, higher than the top rate of federal income tax, twenty-eight per cent. At the same time, the bill boosted the allure of a special-enterprise category: the “pass-through,” in which a business passes its net income through to the tax returns of individual owners, who pay the lower individual rate of tax, rather than the higher corporate rate, while avoiding dividend taxes. One bookkeeping expert quoted by Zidar and Zwick calls owning a small business “the best tax deal in America.”
That is who the everywhere millionaires are: owners of pass-through businesses. These businesses are everywhere, and they do pretty much everything. Our image of wealth skews glamorous and coastal. These businesses and their owners don’t. Some of the firms are well known, part of the familiar roadside furniture of American life—Buc-ee’s, Bass Pro Shops. There are many, many more, and the catalogue of what they do and where they do it is a Whitmanian portrait of capitalism: the “world’s largest mozzarella maker,” Texas’s largest supplier of seamless gutters, “the biggest in the world in the high-end skiwear market,” gas-and-convenience-megastore tycoons, a “massive family-owned supplier of door handles,” “a company that just stored documents for medical and financial firms,” makers of car parts, bakers of hamburger buns, distributors of toilet paper, a tanning-bed mogul who pivoted to waxing when she realized that tanning was going out of fashion.
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The common thread in “The Everywhere Millionaire” is not dazzling innovation. Anyone might have thought to make a fortune from quiche, or hot dogs, or human-resource management, or office supplies, or convenience stores, or gas stations. The secret ingredient is no secret: it’s the sheer remorselessness, ingenuity, and resilience of the business owners.
If that were all there was to the everywhere-millionaire story, we could celebrate it as an example of how non-crony capitalism is supposed to work, a meritocratic free-for-all. Unfortunately, there is a shadow side. As Zidar and Zwick argue, their protagonists, for all their virtues, are also “central characters in the saga of rising inequality.” Between 1980 and 2024, the share of national income going to American workers is estimated to have declined from sixty-five per cent to fifty-six per cent, meaning that “nine cents of every dollar that a firm creates that used to go to workers now goes to firm owners.” There have been increases in productivity, remarkable ones. The authors, surveying “top-owned firms,” report a recent rise in labor productivity from thirty-four thousand dollars a year to fifty-two thousand dollars a year. If the annual proceeds had been shared equally, that eighteen-thousand-dollar increase would have meant nine thousand dollars each. Instead, fifteen thousand dollars has gone to owners and three thousand dollars to workers. The so-called Gilded Age and the years following saw huge income disparities; in the early twentieth century, the highest-earning one per cent of households earned eighteen per cent of all income, and the bottom ninety per cent earned sixty per cent. The equivalent numbers in 2022 are worse: twenty per cent and around fifty per cent.
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The free-market economy of the U.S. has, when you look closely, a remarkable number of restrictive practices, many of them concentrated in industries where the Main Street Millionaires got rich. Beer distribution—the highly lucrative and highly protected intermediary industry between brewers and bars—is one. Car dealerships are another. In both cases, legal protections designed to defend the little guy against bullies—the brewers, the car manufacturers—ended up creating a new category of bully. The same logic extends to the labor market. Around eighteen per cent of American workers, one survey found, are bound by non-compete agreements. It is hard to see why a janitor should need one, unless you run a company that supplies janitorial services. As Rabbit’s son explains to him, the secret to wealth in America is that “you just get yourself in the right position and it comes.”
Realtors have also done a sensational job of defending their throne. “While 90 percent of homebuyers now find properties online, nearly 90 percent of them still use agents to buy their homes,” Zidar and Zwick write. Agents typically collect a five to six per cent commission rate per sale. That comes to about a hundred billion dollars a year. Uncoincidentally, the National Association of Realtors “spent more on federal lobbying than any other U.S. company or organization during the 2024 electoral cycle.”
Doctors are heavily represented among Main Street Millionaires and have the political clout to show for it. Doctors’ lobbying organizations, fearing a glut of clinicians, fought for limits on the number being trained, and the 1997 Balanced Budget Act capped the residency positions for which most teaching hospitals could receive Medicare funding at roughly their 1996 levels. “By 2017, the number of doctors per thousand people in the United States was 2.6, nearly 30 percent lower than the average of 3.5 in other advanced economies,” Zidar and Zwick write.
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