For decades, the narrative surrounding the top 1% of earners in the United States has centered on Wall Street financiers and Silicon Valley tech executives. However, groundbreaking research from economists Owen Zidar and Eric Zwick paints a distinctly different picture. By analyzing comprehensive IRS and Federal Reserve data for their upcoming book, The Everywhere Millionaire, Zidar and Zwick have uncovered a quiet economic shift: more than half of the income growth among the top 1% since 1985 stems from pass-through businesses. This revelation fundamentally challenges conventional wisdom about where American wealth is generated and who controls it.
Unlike traditional C-corporations, pass-through entities - such as S-corporations, partnerships, and limited liability companies - channel business income directly to the owners' personal tax returns. According to the data highlighted by Scott Galloway, the proliferation of these entities signals a much broader, decentralized wave of American economic dynamism. Wealthy private business owners are not confined to traditional coastal financial hubs. Instead, they are thriving across the country, operating localized and regional enterprises that quietly generate substantial fortunes.
For founders, builders, and business leaders, this trend underscores the immense potential of building privately held, operational businesses. While venture-backed hyper-growth dominates media headlines, the Zidar and Zwick data demonstrates that steady, cash-flowing private enterprises represent a powerful engine for long-term wealth accumulation. The rise of the everywhere millionaire proves that building a scalable business outside of the traditional venture capital ecosystem remains one of the most reliable pathways to the top tier of the American economy.
Ultimately, understanding the mechanics of pass-through wealth allows modern entrepreneurs to better appreciate the structural advantages of private business ownership. As economic policies continue to evolve around business taxation and small-to-midsize enterprise structures, founders must recognize that sustainable operational success is the primary driver of modern elite wealth.