So much of America's wealth is really held by "Everywhere Millionaires"

Who comes to mind when you hear the words "rich" and "wealthy"? Maybe it’s one of these names: Bezos, Zuckerberg, Musk.

But what if we change the question slightly: Who's the wealthiest person that you know? Someone you grew up with or someone in your community.

Odds are that's not a Silicon Valley tech mogul or Wall Street banker. It's probably a small business owner — maybe someone with a chain of restaurants or the local construction company. And, as it turns out, these folks actually hold the majority of wealth in this country.

Eric Zwick and Owen Zidar have written a new book about this, "The Everywhere Millionaire: Who is Really Rich in America and How They Got There." Zwick is a professor of economics and finance at the University of Chicago Booth School of Business. Zidar is a professor of economics and public affairs at Princeton University.

They spoke with “Marketplace Morning Report” host Kimberly Adams for more on the book. And the following is an edited transcript of their conversation.

Kimberly Adams: Eric, I'll start with you. Help me understand this a bit better. We see headlines almost every day about how wealth is getting more concentrated at the very, very top, and I think that's what we often think about when it comes to how people get rich. What does your book say about how it actually works in America?

Eric Zwick: The real untold story of wealth that we tell in the book is this hidden group of millionaires, “Main Street Millionaires” in America. They're wildly successful private business owners. They operate in industries and places that we say they fly under the radar, so we call them the “stealthy wealthy.” Sometimes they own an operating company that replaces elementary school carpet floors or makes rubber mats for cars. They distribute toilet paper.

Adams: Owen, how many of these “Everywhere Millionaires” are there in America?

Owen Zidar: We estimate that there are around 3 million “Everywhere Millionaires” who are business owners outside of tech and finance who have at least $5 million.

Adams: And how much wealth do they hold?

Zidar: I think collectively it's around $50 trillion, which is enormous. The Forbes 400 only has about a tenth of that.

Adams: Eric, who were some of these “Everywhere Millionaires” that you talked to for this book?

Zwick: We tell the story in the book of a guy named Dick Portillo, who started a hot dog stand in suburban Chicago and grew it into a behemoth over 40 years. And then we also meet some car dealers in the book, like this guy named Terry Taylor, who's so secretive that they refer to him as Batman because he refuses to do interviews. Forbes didn't know anything about him, and then they found him a few years ago, and they've listed his net worth at $2 billion every year since.

Adams: How new is this information, just the ability to kind of quantify things this way? And why did you two feel it was important to frame it this way?

Zwick: Our research in the book and then the academic research that it builds on comes from over a decade of us working initially in the bowels of the Treasury Department with administrative tax data, where we were able to link the population of businesses to people at the top of the income and wealth distribution and sort of ask, what is driving the growth of their income and wealth over time? In the 1980s, personal tax rates — so the tax that individuals pay — were much much higher than the corporate tax rate. But then in 1986, Ronald Reagan [and] Democrats in Congress passed a simplifying reform that brought the personal tax rate down a lot, actually below that corporate rate. All of a sudden, it made sense to reorganize your business such that you don't pay tax at the business level.

Zidar: The two key dates in my head are 1986, when this really started taking off, but also 2017, when President Trump passed the biggest business tax cut in U.S. history, the Tax Cuts and Jobs Act.

Adams: And to put that into the current-day context, there was just this big Republican tax and spending law that President Trump signed last year that codified those tax cuts and made them permanent. Is this trend going to continue?

Zidar: One of the notable things about the One Big Beautiful Bill Act that you mentioned is that there are these really controversial Medicaid and SNAP cuts that collectively were about a trillion dollars. And what wasn't really talked about was that, on the other side, there were about a trillion dollars of cut in the form of preserving this 20% deduction [for taxable income for small business owners], as well as continuing to erode the estate tax system. We need tax revenue as a country. And I think one reasonable step is to kind of ask very wealthy business owners to pay something closer to what ordinary salaried workers like us pay.

Adams: Eric, do you see the rise of the “Everywhere Millionaire” almost as the American dream at work? Because if you think about it, you've got regular folks following the law, using the systems that are available, to create quite a bit of wealth. Isn't that kind of the goal of the capitalist system?

Zwick: You know, I think one way to think about what we're saying is the American dream is more alive than you think, but it's not necessarily where you're looking. So there are all these paths to real wealth that are much wider than the standard kind of credentialed labor market story might suggest. So if you thought that the game was totally rigged and there was no upward mobility, I think the data just strongly rejects that view. At the same time, there's no question that it helps to be born to high-income parents, and especially business owner parents.

Adams: Owen, do you think it's a good thing or a bad thing that more people are becoming millionaires this way?

Zidar: I think there's a nice quote from Bill Clinton from a debate stage with George [H.W.] Bush, where he said, "I want to have more millionaires in this country than Reagan did and Bush did.” And, you know, Clinton basically wanted more millionaires and more people to have a shot. And my view is that that's the right orientation, and it's good when we have more prosperity and more opportunity in America.

Adams: Let's say people now have a new view of who's rich in America, and they're walking down the street looking for the new millionaires after having heard this conversation, or, of course, read your book. What do we do with this information?

Zidar: I think there's a couple different things you can do. So one is, if you want to get rich yourself, you can realize that it's much closer to home. You don't have to be some tech CEO to actually make a lot of money. There are a ton of businesses near where you live. A second thing is, if you want to understand policy outcomes, I think it's very helpful to have this lens for understanding the rise of inequality and the rise of who's shaping a lot of rules. Not just at the federal level, but at the state and local level. And that impacts your day-to-day, like how much you pay for a car or how much you pay for a house, or whether or not you're able to buy a house. And so I think that's something that we talk about in Part 3 quite a bit, is what this means for the rest of society.

Adams: And, Eric, what does it mean for the rest of society? I don't want you to give away the whole book, but some hints.

Zwick: If it's successful, it'll be like … I'll get all these texts from friends who've read the book and like, “Oh, I just ran into somebody at, you know, daycare program. The parent, they run these plumbing businesses, and they just sold their business for $45 million,” or something like that. And to Owen's point, then it's like, OK, we have a policy problem we want to solve. How do we get more people onto an upward mobility ladder? Well, we should probably make sure that the opportunities are available to go down these paths. And if we want to solve some of our fiscal problems, we need to maybe broaden the aperture of what we're looking at beyond just a wealth tax on a few billionaires.