Source: Smith, Yagan, Zidar, Zwick (2019)

At the 90th percentile, about 90 percent of income arrives in a paycheck. By the top 0.1 percent, wages are down to roughly 40 percent, and business income is nearly half the total. Is this pattern an American peculiarity?

As we’ve presented our work, it’s been really interesting to hear about what people see in other countries: a material role played by private business for the rich everywhere.

Business income in the United Kingdom

In the IFS-Deaton Inequality review, Delestre, Kopczuk, Miller, and Smith replicated this figure of ours using UK data. Their measure doesn’t include a lot of business income retained in companies, which is important in the UK (see Fig 6) since they don’t have large pass-through firms whose income flows to owner tax returns.

Still, you see the same decline in income coming from wages as you move towards the top of the income distribution and a bigger role for business income. Employment income falls from about 80 percent of income for most of the distribution to just over half for the top 0.1 percent, while active business income rises to nearly 30 percent.

The Economist, reviewing our book, described American business owners as pursuing wealth “with star-spangled doggedness” with a hint of envy. But there are a lot of wealthy British business owners too!

Source: Delestre, Kopczuk, Miller, and Smith (2022)

Das land of the Mittelstand

In Germany, the pattern is especially striking. Bach, Bartels, and Neef build distributional national accounts for Germany and find that at the very top, non-corporate business income (the orange bars below) looms even larger than in the U.S.

Source: Bach, Bartels, Neef (2026)

And when you ask which businesses Germany’s top earners own, you find substantial overlap with similar lists from our work. For the top 1 percent, the biggest category by far is medical and dental practices, followed by law firms, architecture and engineering offices, landlords, accountants, retailers, restaurants and ice cream parlors, car dealers, even veterinary practices.

Germany’s everywhere millionaires look a lot like America’s.

Source: Bach, Bartels, Neef (2026)

Swedish business owners

Jakobsen, Kleven, Kolsrud, Landais, and Muñoz measure how many households own a closely held business (”CHB” in the figure) at each rung of the wealth distribution. Below the top decile, business owners are rare: just a few percent of households. In the top 0.1 percent, more than a third own one.

Source: Jakobsen, Kleven, Kolsrud, Landais, and Munoz (2026)

What do you see in other countries?

In some countries, because the tax code encourages business owners to shelter income within their firms, it has been harder to see these rich business owners than in the U.S. The rise of pass-throughs in America was both an economic revolution driving top wealth and measurement revolution for understanding that wealth.

Nevertheless, business ownership appears to be a key path to the top across many countries. And as new data that links business owners to their firms becomes available globally, we suspect this story has many more chapters to tell.

For example, there has long been a conventional view that inequality trends have diverged between the U.S. and France. In fiscal series, the latter country shows low growth in top incomes and little role for private businesses at the top. But that’s only part of the story…

It turns out this is only part of the story connecting taxes to the labor share. The true contribution of tax policy to how we measure labor income is likely much larger.

Paid in Promises

A few years ago, Andrea Eisfeldt, Antonio Falato, and Mindy Z. Xiaolan (EFX) published a fascinating paper called “Human Capitalists,” which focused on the growing role of stock-based compensation for workers at public companies. One of us (Zwick) had the opportunity to read the paper carefully and discuss it as it wended its way through the publication process.

EFX argue that when public companies pay their workers in stock, these payments don’t generally show up as labor compensation. Being paid more in promises of future profits means workers will accept lower current cash compensation, even though the underlying nature of the arrangement is to compensate workers for the firm’s use of their human capital.

It turns out the rise in stock-based pay is big enough to be relevant for the aggregate labor share. And it has grown over time.

The Survey of Consumer Finances (SCF) asks respondents whether they hold company stock in their portfolios. Excluding the business owners in our book and in the prior post, between 20% and 60% of people in the top decile of the income distribution report holding company stock.

This share has risen substantially since the late 1980s, especially within the top 1 percent. For those who own stock, it accounts for between 40% and 60% of their total stock portfolios (excluding pensions) and between 20% and 40% of their non-housing wealth.

A Common Ancestor: The Tax Reform Act of 1986

EFX’s claim about missing labor income in the national accounts requires both rising stock compensation (obviously true) and that this compensation is not properly recorded. Why would that be the case? Taxes!

Stock pay takes a few different forms. First, there are non-qualified stock options (NSOs), which are recorded like wages on Form W-2 when exercised and then treated as stock. Second, there are incentive stock options (ISOs), which are only ever recorded as capital gains. Third, there are restricted stock units (RSUs), which are recorded on Form W-2 when vested and then treated as stock.^[1]

Early employees and founders of companies who receive stock options can reduce the share of income that appears as W-2 and thus reduce their total tax burden by converting their options in advance of vesting, via what’s called an 83(b) election.

Paying workers in promises has gotten much more appealing over time, in large part due to the evolution of the tax code. The Tax Reform Act of 1986 made the pass-through form an appealing option for closely held business owners to lower tax by paying personal tax rates. We tell this story in our book.

That tax reform simultaneously made paying workers more attractive than the in-kind compensation that prevailed in the 1960s and 1970s. Think company cars, family vacations, and exceptionally generous pensions.

Tax rates on capital gains fell further in the late 1990s and 2000s, strengthening the incentive for firms to tilt pay away from cash. And tilt they have.

Adding It All Up

We previously argued that the rise of pass-throughs can account for about a third of the decline in the corporate sector labor share. EFX make a similar quantitative argument about the stock-based pay story. Could the rise of equity compensation account for another third of the decline?

In our data for 2017, after adjustments for the rise of pass-throughs, we report employee compensation of $7.2 trillion and corporate value added of $12.2 trillion. The unadjusted corporate profits number (which excludes partnership profits) is $1.7 trillion. If we could find around $200 billion of “missing” labor compensation, that would account for about a third of the fall in the labor share since the late 1970s.

Thus, if workers owned a bit above 10% of those corporate profits via stock compensation, then that would cover the difference. Distributing this amount across the top 10% of public company employees, of which there are 4.2 million, this ownership would imply an additional $40 thousand or so in pay.

The aggregate numbers are thus quite plausible in terms of how much pay might have shifted to corporate profits serving as tax-preferred payments to high earners.

Looking Ahead

The EFX paper’s data ends in 2019 but stock-based pay has continued to climb in subsequent years. One report from Morgan Stanley estimated that stock pay recorded on financial statements was around $270 billion in 2022, up from just $25 billion in 2006. As noted, some of this would appear as wages in the national accounts but a lot of it would show up only in part if at all.

On June 12, 2026, SpaceX went public at a $1.75 trillion valuation, the largest IPO in history. Many headlineswere about the 4,000-plus employees it was about to turn into millionaires, roughly 400 of them holding stakes worth $100 million or more. Cooks, welders, and cafeteria staff were on the list, because, as one account put it, the company “traded lower salaries for equity at every level.”

Set aside Elon Musk’s stake and suppose employees collectively hold even 5% of the company; that’s roughly $90 billion of equity. Most of it is the run-up from lower grant prices—for example, 2025 options were struck around $40—to the much higher listing and traded prices, most recently between $150 and 200 per share.

In some cases, that appreciation (the difference between the strike and fair value at exercise) will be taxed as wages. But any subsequent appreciation is taxed as capital gains, not wages. Workers who were able to pull off 83(b) elections at even lower strike and fair value prices would have virtually all their effective pay treated as capital gains.

Any income classified as capital gains will never appear in the labor income statistics. And it won’t appear in tax data anywhere until the employees sell their shares.

^[1] There are various non-stock approaches, such as allowing special access to company stock via pension arrangements, ESOPs, and profit sharing plans.

The miracle ended in 2000

For most of the twentieth century the labor share hovered around two-thirds. When John Maynard Keynes was shown the stability of the labor share, he called it “a bit of a miracle.”

The miracle ended around 2000. The corporate-sector labor share was 63 percent in 1978, fluctuated modestly through the 1980s and 1990s, and still stood near 64 percent in 2000. Then it fell to 58 percent in 2017 and 55 percent in 2025.

Labor share of corporate value added, U.S. corporate sector. Source: BEA NIPA Table 1.14.

The decline has bolstered the case that economic forces have tilted against workers. Some focus on automation replacing jobs, globalization undercutting wages, monopolies marking up prices, or superstar firms capturing larger slices of the pie. Each of those forces is a compelling candidate. But to really dig into how important these different drivers are, we need to make sure we are measuring the labor share well.

A third of the decline is a tax story

The tax code influences how business owners pay themselves. In a paper with Danny Yagan and Matt Smith, we found that when a company converts from a C corporation to an S corporation, reported wages drop and reported profits jump.

We estimated this behavior using the tax records of 183,000 firms that switched from C to S form between 2000 and 2012. A top-earning S corporation owner who pays herself in profit instead of wages avoids the 3.8% levy that applies to her wage income. A C corporation owner has the opposite incentive. Wages are deductible, so paying yourself a salary avoids the corporate tax and payout tax on dividends. By lowering individual income tax rates and increasing corporate tax burdens, the Tax Reform Act of 1986 made the S corporation the better deal, and a growing share of business owners have given that income the name “profit.”

That change of label pulls down the measured labor share because the national accounts count S corporation profit as capital income. When we add these recharacterized wages back into the labor income bucket, then the corporate labor share in 2017 is about 0.9 percentage points higher.

In addition, many firms have left the corporate sector and reorganized as partnerships. Think of law firms, consultancies, hedge funds, private equity funds, doctors’ and dentists’ offices, and other capital-light, labor-heavy businesses.1 Partnership profit has grown from 13 percent of all business profit in 1980 to 35 percent today.

These partnerships have labor shares more than 10 percentage points higher than the corporate firms left behind. As these high-labor-share businesses left, the corporate sector that remained looked more capital-heavy than it used to. When we treat the partnership activity that migrated out since 1986 as if it had stayed in corporate form, the 2017 labor share is another 0.7 percentage points higher.

Where the understated labor income sits, by industry and mechanism. Source: Smith, Yagan, Zidar & Zwick (2022), Appendix Table A.1.

These two corrections together are worth about 1.6 percentage points. The headline decline from 1978 to 2017 was 5.0 points. Our adjusted decline is 3.4. Thus, the tax code accounts for roughly a third of the decline. Most of that missing labor income sits in the same handful of skilled-service industries — professional services, finance, and health care lead the list — where the owners and the workers are often the same person.

What changed after TCJA

The Tax Cuts and Jobs Act of 2017 did two things that mattered on the labor share front. It cut the C corporation rate from 35 to 21 percent. And it created the Section 199A deduction, which lets pass-through owners shave their top rate to 29.6 percent (provided they aren’t in a “specified service” business like law or medicine). The One Big Beautiful Bill Act of 2025 then made the 199A deduction permanent, kept the 20 percent rate, held the top individual tax rate at 37 percent, and loosened the limits on who qualifies for 199A. The latest pass-through regime cost about $740 billion over ten years.

Did TCJA reverse the incentive to relabel? Some, but not much. By cutting the corporate rate to 21 percent, the law gave some firms a reason to be C corporations again — especially firms that can plow earnings back in and defer the owner’s tax for years. But for owners who want cash in hand and need dividends, the combined 21 percent corporate rate plus the 23.8 percent dividend tax is still steeper than the 29.6 percent the 199A deduction delivers.

In the data, pass-through income at the top has surged since 2017. In 2025 dollars, business income from pass-throughs for the top 1 percent rose from about $620 billion in 2018 to a peak near $880 billion in 2022 before pulling back to $760 billion in 2023. For the top 0.1 percent, it climbed from about $290 billion to a peak near $440 billion before settling at $390 billion.

Top-bracket income by source, in 2025 dollars. The dashed line marks the 2017 tax law. Source: author’s calculations from IRS SOI.

The 199A deduction itself shows the same shape. In 2025 dollars, the deduction claimed by the top 1 percent grew from about $85 billion in 2018 to $110 billion in 2023 — a 30 percent jump in real terms. The growth runs all the way up the distribution. For example, the deduction claimed by the top hundredth of a percent rose almost 60 percent.

The pass-through deduction by income group, inflation-adjusted to 2025 dollars. Source: author’s calculations from IRS SOI.

It’s striking to see how pass-through income compares to everything else at the top. From 2018 to 2023, pass-through income at the top grew far faster than wages and capital gains. Top 1 percent pass-through income rose 49 percent and C-corp dividends rose 54 percent — both far ahead of wages (26 percent) and net capital gains (6 percent). For the top 0.1 percent, pass-through income grew 61 percent and dividends 51 percent, against just 19 percent for wages.

You can also see this pattern in levels. Top pass-through income and dividends both rose in real terms. Top-end wages barely moved.

Thus, the rise of pass-throughs is still driving the labor share down, perhaps playing an even stronger role today than we found in our original paper.

We tell the bigger story of how pass-through owners reshaped the American economy in The Everywhere Millionaire. Pre-order here.

Something we’ve learned already is that experts disagree quite dramatically about the expected revenue the proposal will raise. On the pro side, Galle, Gamage, Saez, and Shanske (GGSS) have estimated the tax will raise around $100B. On the con side, Rauh, Jaros, Kearney, Doran, and Cosso (RJKDC) have estimated the tax will raise only $40B in gross terms. If we account for revenue losses in future years, they calculate a net present value of tax collections that is negative $25B.

These are both serious teams of economists and legal scholars. How can they be so far apart?

What is a wealth tax?

The political narrative tends to treat income and wealth as separate concepts. But they are closely related. That link can help clarify the debate around wealth taxes.

Consider a wealthy person with $100M of financial wealth invested in a mix of bonds and stocks. Assume that wealth generates a rate of return of 5%. That means $5M of income coming in each year.

Consider a 2% annual wealth tax. Just two cents, right? Well, that amounts to $2M of wealth tax liability for this portfolio, or 40 percent of the income flow. In other words, that 2% wealth tax is equivalent to a 40% income tax, levied on top of the income tax already in place.

In California, the federal plus state income tax rate on an investment portfolio like this might be around 40-50% depending on the asset mix. So, a 2% wealth tax would yield the equivalent to an income tax rate of 80-90%. California’s one-time 5% rate could mean a one-time income tax rate of 150% for some!

This is one reason why rich people are so angry about wealth tax proposals.

But California’s wealthy are different

Proponents of the California wealth tax raise an important objection to the logic above. As we’ve written before, many of California’s billionaires don’t look like this example. That’s because most of their wealth comes in the form of stock in listed companies, many of which don’t pay dividends at all.

When those companies reinvest their profits or buy back shares (that the California billionaires haven’t sold), the wealth of these billionaires goes up. But they don’t owe extra tax.1

Unrealized capital gains aren’t taxed, pass-through losses and other deductions shelter other income, and several other tax benefits and avoidance strategies flourish. When realizations do happen, long-term capital gains are taxed at preferential rates or passed on tax-free via step-up of basis at death and other estate tax tricks. When taking advantage of these tax rules, billionaires can face much lower actual baseline tax rates.

In practice, there are many wealthy individuals who pay little personal income tax. Warren Buffet, for example, famously said he pays a lower tax rate than his secretary. Under several assumptions, Balkir, Saez, Yagan, and Zucman (2025) estimate that the Forbes 400 paid around 24% all-in effective tax rates (including corporate income taxes), which is lower than 30% for the full population and 45% for top labor income earners.2

Returning to the wealth vs income tax comparison, for some of these billionaires, the realized returns on their wealth have also been much greater than 5%. An average realized rate of return of 20% or 50% would mean that even a 5% wealth tax is just 10% or 25% of the change in their wealth. However, that doesn’t include the additional income tax the billionaire would have to pay when they paid the wealth tax from liquidated stock.

To pay $5M in wealth tax on $100M in wealth that had approximately zero initial price, the billionaire would owe another 40% or $2M in income tax, making the wealth tax effectively a 7% one-time tax.

Nevertheless, it seems clear that the billionaires can afford to pay the proposed wealth tax. If necessary, they could borrow against their stock to finance the payment and delay the extra capital gains hit.

But will they pay it?

Leaving from California with a tax bill on my mind

Returning to the disagreement in estimated wealth tax collections, what’s driving this $125B gap?

The key is how much avoidance each group assumes. GGSS apply a 10% avoidance estimate to the $2.2T in billionaire wealth. So, if the zero-avoidance revenue estimate was around $110B, they assume $10B would dissipate when the dust settles. They cite as justification the transparency of California’s billionaire wealth in public company stock, the small number of people who can be “easily” audited, and most important, the retroactive design of the tax.

What does 10% mean in terms of actual people? RJKDC report that, out of 212 billionaires they believe might have been subject to tax, the top 5 hold nearly half of the collective wealth of this group.

Put plainly, to wipe out 10% of the base ($218B), you just need one Zuckerberg to flee the tax. Sergey Brin and Larry Page alone account for a quarter of the base (around $500B). According to media reports, Brin and Page have already left. If true, this would wipe out more than double the 10% assumption. And that doesn’t account for avoidance by anyone else in the tax base.

GGSS have argued that the retroactive design captures the wealth of these purported movers. In other words, the rich people may think they moved, but GGSS disagree. Call this the Don Henley provision—you can check out any time you like, but you can never leave.

There are other assumptions driving the remaining difference between estimates. But this avoidance assumption is the most striking and consequential.3

We will have to wait until November to see if California’s voters want to test it.

The Federal Reserve’s aggregate private business wealth series in the financial accounts has fallen by nearly $400 billion in nominal terms over the past few years.

But during this period, the stock market had boomed, inflation was high, and private business values usually closely track those in public markets. They should have been climbing. Instead, the Fed’s private business number how fallen by 3 percent since 2022.

What the DFA Actually Measures

The Journal had used the Fed’s Distributional Financial Accounts (DFA) to break down the portfolios of the ultra-wealthy. Based on data and insights from our book, the story documented the boom in Americans worth tens of millions of dollars. One of the charts showed that “private businesses” make up a declining and now-modest share of top 0.1% wealth in the DFA, with corporate equities dominating portfolios at the very top. The misleading implication is that the rich are primarily stockholders. In fact, they are not.

The issue, we learned, is that the DFA’s “private business” category is much narrower than what most people mean by the term. It covers only proprietor’s equity in noncorporate businesses — partnerships and sole proprietorships. Not S-corporations. Not other private corporations. Not financial partnerships like private equity or hedge funds. Just noncorporate, nonfinancial businesses.

Private corporations are valued separately, but the Fed can’t distinguish households’ holdings of private corporate equity from their holdings of publicly traded stocks. They’re all lumped together into “corporate equities.”

Consider what this means in practice for a simple restaurant-supply company, Jetro Restaurant Depot, which started in a Brooklyn warehouse in 1976. Last month, it was acquired for $29 billion. The founder, Nathan Kirsh, still owned most of the company. It operates 166 stores across 35 states and generates $16 billion in annual revenue. Forbes estimates Kirsh’s wealth at $7.3 billion. Most Americans have never heard of him. And in the DFA, his equity in this enormous private business gets classified as “corporate equities” — indistinguishable from someone holding an index fund or Apple stock.

Kirsh is in good company. A multitude of wealthy private business owners operate private corporations. The car dealership chain, the regional medical practice, the HVAC company with locations across three states — in the DFA, many are categorized as “corporate equities”.

How Far Off?

In our top wealth paper, we identified several reasons why the total amount of private business wealth in the financial accounts is too small. S-corporation equity is estimated using ratios that undervalue asset-light service firms — consulting, tech, professional services — where the value is in people and ideas, not physical plants. Financial partnerships like private equity firms and hedge funds aren’t included at all. And intangible assets and brand value aren’t measured for any private business, even though market prices implicitly capture them for public companies.

When we compared the Fed’s totals to the Survey of Consumer Finances — which asks wealthy households directly about the value of their businesses — the financial accounts figures were around half the aggregate size implied by the SCF. The SCF has its own limitations; self-reported values may be optimistic. Or private business owners might be reporting the price at which they’d be willing to sell. But a factor-of-two gap is hard to ignore.

The SCF tells a different story about what the top 0.1% actually owns. Private business shows up as roughly 45 to 50 percent of top wealth — far larger than the DFA’s “private business” label suggests. About 80 percent of households worth $30 million or more are business owners.

Who’s Actually Rich

The DFA is a valuable resource. But if you rely on its portfolio breakdown, you’ll overstate the role of public equities and understate private business ownership. And that distortion shapes how we think about who is actually wealthy in America and how they got there.

The typical ultra-wealthy household is not a stock-picking financier on the coasts. It’s a business owner — often in an unglamorous industry, often outside major metro areas. The car dealership owner in Omaha. The HVAC company founder in Charlotte. The restaurant supplier who built a $29 billion empire from a Brooklyn warehouse. They’re everywhere. And the standard data makes them hard to see.

That is a rounding error in a $60.7 billion budget. But the backstory of this provision is a great illustration of how Main Street Millionaires have shaped the tax code at all levels of government.

Why the deduction was created

New Jersey taxes business income in an unusual way. Rather than letting owners net gains and losses across all their business activities, the state uses a “bucket” system: income from an S corporation goes in one bucket, partnership income in another, rental income in a third. Losses in one bucket can’t offset gains in another.

In 2011, in the aftermath of the financial crisis, the legislature created the Alternative Business Calculation to reform the bucket system. The idea was to let business owners net across categories and use up to 50% of the resulting “increment” to reduce taxable income, with losses carrying forward for 20 years. It was designed for the kinds of entrepreneurs politicians love to invoke — the contractor, the local manufacturer — who were trying to survive a brutal recession.

What happened next

The economy recovered. And the deduction became very useful to a different kind of taxpayer.

The Alternative Business Calculation is most valuable to high-income owners with multiple pass-through businesses. In any given year, losses from one business can shelter profits from another. Think of a real estate LLC with a bad year offsetting gains from a thriving regional trucking company.

The ABC adjustment delivered substantial benefits to very wealthy Main Street Millionaires. Filers earning over $1 million account for less than 5% of claimants but receive 36% of deduction dollars.

New Jersey Treasury, Statistics of Income, Tax Year 2019. Filers earning over $1 million account for just 4.7% of claimants but receive 35.8% of deduction dollars.

A small provision, a broader pattern

Governor Sherrill’s reform is reasonable. Capping eligibility at $1 million in business income returns the deduction closer to its original intent.

The episode reflects a broader pattern. Individually, provisions like this are small. But taken together, they add up and increasingly tilt toward the wealthiest business owners. Many policies designed for Main Street drift upward over time.

The Everywhere Millionaire is full of stories like this one. Policies designed for Main Street often benefit its wealthiest owners. Real reform requires looking beyond headline rates towards the accumulation of provisions like this one.

On February 20^th, the Supreme Court ruled that the Trump administration’s Liberation Day tariffs were unconstitutional. This decision made headlines across the world, as a key pillar of the administration’s economic policies collapsed.

Many have written about what this decision teaches us about the limits of executive power. But it also offers a lesson about the omnipresence and omnipotence of Main Street Millionaires.

The plaintiffs in the case were business owners who paid the tariffs. From the two separate cases that merged there were seven businesses involved (two owned by the same family). Let’s learn about them. Like how we ranked the NFL owners in the playoffs (Silicon Valley won the Super Bowl this year), we’ll also give them a Main Street Millionaire score (MSMS).

The Plaintiffs

Atop the list are Learning Resources Inc and hand2mind (MSMS = 10). Based in suburban Chicago, they make educational toys. The combined business has around 500 employees, reported a combined revenue of $250 million, and remains closely held by the Woldenberg family. hand2mind markets directly to school districts, whereas Learning Resources targets consumers. Circana ranked them as the 25^th largest U.S. toy company.

This is a very large family business, off the radar yet its products are everywhere. There are four generations working in the business. And the family’s combined net worth could well put them into centimillionaire status.

Next up is Terry Precision Cycling LLC (MSMS = 9). Located in Burlington, Vermont, the company sells women’s cycling apparel and gear. Georgena Terry founded the company in 1985 in Rochester, New York, after recognizing that standard bike frames were designed for male proportions. She built custom frames in her garage and grew the business into the leading women-specific cycling brand through the 1990s. Liz Robert bought the business from Terry in 2009 and retired as CEO/owner in 2024 after selling the company to Flagg Bicycle Group, another MSM business.

We love this story. To develop her early prototypes, Terry drew on her background as a mechanical engineer trained at Georgia Tech. And while MSMs have historically been disproportionately men, we meet several amazing female founders like Terry in our book. The story also shows what can happen to a business when MSMs retire but manage to find a natural successor to take over.

Up next is FishUSA (MSMS = 8), an online fishing tackle retailer founded in a garage in 2000, based in Fairview, Pennsylvania, near the “steelhead alley” in Lake Erie. The company has 37 employees and reported in proceedings just under $10 million in revenues in 2025. Dan Pastore was a lawyer who switched to internet startups in the mid-90s. He started FishUSA in 2000 while in his early 40s.

We give this an 8, because the story of the business and founder background both fit the bill. While a business this size would be at the lower end of the net worth spectrum for MSMs, Pastore is likely living quite comfortably. And he generated enough visibility to mount an unsuccessful bid for Congress in 2022. The intersection between MSMs and elected office is another big storyline in the book; Pastore lost to Mike Kelly, an auto dealer!

VOS Selections (MSMS = 6) is a fun one, a wine importer and distributor, owned and operated by founder Victor Owen Schwartz, in midtown Manhattan. Schwartz was an econ major at Cornell and pivoted from a career in commercial banking to wine distribution in his late 20s. When starting the business, he moved to France to build relationships with small, artisanal, family-owned producers, which form the core of their business. His daughter Chloe runs the company alongside him.

We give this one a 6. Depending on margins, the business might not be quite large enough to qualify as MSM. But the industry and background fit the profile of many alcohol distributors we meet in the book.

Then there’s MicroKits LLC (MSMS = 3). Based near Charlottesville, Virginia, David Levi makes educational electronics kits for children. He started the business in 2020 to encourage children’s interest in hands-on engineering.

David is not a MSM…yet. But he could be on his way. We meet several characters whose early career resemble David’s in our book.

Lastly, we have Plastic Services & Products LLC (d/b/a Genova Pipe) (MSMS = 1). They manufacture and sell chlorinated PVC and ABS pipes and fittings for plumbing. The original company, Genova Products, manufactured plumbing and rainwater products and was founded in 1960 in Davison, Michigan. Genova was acquired out of financial distress in the pandemic by Plastic Services and Products and appears to have financial owners (e.g., private equity).

This gets a 1 because, while the nature of the business is very Main Street, its ownership does not appear to be so and hasn’t been for a while.

The Army Behind Them

The plaintiffs in these cases were drawn from a pool of 301 thousand businesses that paid the tariffs. Attached to the cases at the Supreme Court was an amicus brief that collected testimonials from 30 more companies and signatures from more than 700 small businesses across the country, including an importer of hand-painted Chinese wallpaper from New York City; a guitar effects pedal maker from Akron, OH; a bag company from Fairfax, Virginia; and a design company from Montana.

Why weren’t the huge retailers like Walmart and Home Depot at the center of these cases? In part, the answer is the enduring popularity of small businesses in American culture. Lawyers chose these plaintiffs to bring cases that would appeal to judges both on substance and emotionally.

Relative to the faceless mega corporation, American small business owners present compelling human stories from all parts of the country and many walks of life. Main Street Millionaires can harness this popularity to win policy victories, in these cases for consumers, but in many other cases for themselves.

In our book, we explore the origins of their power and its effects on the economy today. Read it and you will no longer be surprised to find them as central players in the policy battles that lie ahead, whether it’s the fight to force the Treasury to refund tariffs already paid or the fight against income, wealth, and estate taxes on business owners.

Private firms account for roughly half of all business profits in America. If that fact surprises you, you’re not alone. The popular conversation about the economy is oriented almost entirely around publicly traded companies — Nvidia, Tesla, Berkshire Hathaway — and the stock indexes that track them. But these firms represent just a sliver of the broader picture.

A recent slide deck from Torsten Slok, Rajvi Shah, and Shruti Galwankar (SSG) puts striking numbers on this point. They compare the S&P 500 to broader measures of business activity from other data sources. Their takeaways resonate with what we have found in our research using administrative data that covers the whole economy.

• Counts. Three of four US firms with revenues greater than $100 million are private. Private business is a huge story even among big companies!

• Profits. The profits of S&P 500 companies add up to around half of total corporate profits in the economy. The other half goes to smaller, mostly private firms. Moreover, because the S&P 500 generates a lot of profits from activity outside the US (e.g., only 10-20% of iPhone users are in the US), private firms in the US account for an even larger share of profits earned domestically.

• Jobs. SSG estimate that S&P 500 companies employ 28 million workers, including both US-based on non-US workers. Total private sector employment in the US is about 135 million and federal, state, and local governments employ another 25 million. Thus, the biggest, most talked-about companies in America account for less than one in five jobs.

• Investment. News stories abound with astronomical capital expenditure (capex) plans for data centers by tech companies. In recent years, SSG estimate that the capex of S&P 500 companies is about 20% the size of the spend in the broader US economy. Much of their investment occurs outside the US (see Figure 1 in our TCJA paper), reinforcing the story of how incomplete a picture of the US economy we get from fixating on large public companies.

• Job Growth. SSG find that firms with fewer than 250 employees accounted for 79% of job postings in November 2025. That share was up from 72% in January 2020. As far as job growth is concerned, the S&P 500 firms represent a shrinking slice of the economy in recent years.

The next time you see a headline about what the stock market did today, remember: most of the economy isn’t reflected in the stock market. When analysts talk about how the stock market is doing, they’re talking about less than a fifth of American jobs and investment and roughly half of profits. The people generating the rest of America’s economic activity are largely unseen in the media.

We've spent the last decade studying the businesses in this invisible economy. Our book tells the story of who runs them, where they live, and how they have amassed tremendous wealth. You can pre-order it here.

The cover captures something central to the book — the story of wealth in America isn’t just a story about Wall Street or Silicon Valley. It’s a story about Main Street: a story of the quiet fortunes built through private businesses in communities across the country. This story is largely unheard in the public conversation about opportunity and inequality.

We’ve spent years working with unprecedented data to uncover who these people are, how they built their wealth, and what their stories mean for the rest of us. We can’t wait to share it with you.

In the mean time, you can entertain yourself trying to find all the Easter eggs on the cover. Or you can pre-order the book here!

The WSJ reported that the luxury market was especially active last year. There were more than 1,600 home sales of more than $10 million in the top 10 luxury markets alone. Intriguingly, they also found a rise in $10-million-plus sales outside the usual suspects in emerging markets like Phoenix and Dallas.

Who is driving these trends in the housing market? What is the connection to broader trends in the economy and inequality?

Rising house prices reflect a broad-based rise in demand

As of 2024, according to Redfin there were 8 million homes worth more than $1 million, more than double that number in 2019. In the 2023 American Housing Survey, there were 1.6 million homes worth more than $2 million, and 300 thousand homes worth more than $5 million.

Neither the rapid rise of billionaire wealth, nor the entry of corporate buyers can possibly account for this massive demand for high-end real estate.

Consider the billionaires. Stories about Ken Griffin’s eye-popping acquisitions are entertaining but they can’t really teach us much about the link between inequality and housing affordability.

We estimated that the Forbes 400 list represented around 1,200 households, once one accounts for the Forbes members’ adult children. Making an aggressive estimate, assume each Forbes household has ten properties and each of their children has three more. That would only give you around 6,500 houses total. Adding billionaires not listed in Forbes might double that figure, but it would still be a drop in the bucket.

Similarly, headlines about Blackstone and other private equity firms buying up single family homes are good clickbait. But corporate mega-buyers of such homes account for just 2 or 3 percent of single-family rentals nationwide and less than half a percent of the stock of 75 million single family homes.

The most straightforward explanation for rising house prices across the country is rising demand from the mass affluent, whose numbers and collective wealth have grown far faster than the supply of homes, especially in the higher end market.

Data from home builders tells the same story

Look at what kinds of houses builders are delivering to market. The mix of new construction is increasingly directed toward this mass of millionaire buyers. Whereas 10% of the existing housing stock has more than 3,000 square feet, more than 20% of new construction is that big. Nearly 10% of new units have more than 4,000 square feet.1

Industry reports suggest the ballpark price for building higher-end new construction is around $500 per square foot. That implies $2.5 million as an entry cost for the 60,000 new homes brought to market in 2024 with more than 5,000 square feet of space. Just absorbing this flow of high-end demand requires tens of thousands of wealthy people to be able to afford these homes.

Who are all these rich people?

Many of these homebuyers are the Everywhere Millionaires we write about in our book.

A case study from the Chicago suburbs illustrates the point. In November, Crain’s Chicago Business profiled Jena Radnay, the realtor who participated in Chicago’s four highest-priced home sales of 2025, which ranged from $11 million to $31 million in the city’s northern suburbs.

Radnay said many of the buyers were “doing well with their business [or] sold their companies and cashed out.” This is happening in suburbs across America. If $30 million homes in Winnetka, Illinois, are being purchased by unknown business owners rather than athletes or Forbes-famous billionaires, the demand pool for luxury housing clearly runs very deep.

We pulled the latest Forbes 400 data (with help from Claude Code) and found a striking split. Though if you’ve read our forthcoming book, you won’t find it surprising : )

California’s billionaires are concentrated in tech and finance. Around half of Forbes billionaires in California are in tech, and nearly 80% of their collective wealth comes from tech. Add finance (including VC, PE, and hedge funds) and these two industries account for 90% of Californian billionaire’s wealth. Only about a quarter of California’s billionaires made their money outside tech and finance.

Just the top 4 tech billionaires alone—Mark Zuckerberg ($253 B), Larry Page ($179 B), Sergey Brin ($166 B), and Jensen Huang ($151 B)—collectively hold around half of Forbes billionaire wealth in CA, which is one reason why there is such interest in the high profile departures of Page and Brin.

The rest of America is far more diverse. Sixty percent of billionaires outside California made or inherited their fortunes in other industries—retail, food, manufacturing, real estate, and more. Roughly half of their collective wealth in Forbes comes from outside tech and finance as well.

Why this matters for the debate about taxing billionaires: It’s unclear whether tech and finance billionaires are more or less mobile than billionaires in other industries and states. Someone who built a regional retail chain or food company may have stronger ties to a specific location than someone whose wealth is in a publicly traded tech stock. On the other hand, California billionaires who still want to work might find that they can’t replicate the productive environment of the California tech ecosystem. These distinctions might matter for predicting how billionaires respond to such a tax. (So far there are anecdotes of departures of not only tech billionaires, but also auto dealers).

Forbes also misses people. The list relies on investigative reporting rather than administrative data, and some billionaires are better at staying private than others. Anecdotally, we’ve heard stories of several people rich enough to be on the list who aren’t there. As the editor of the Forbes 400 told the New York Times Magazine, her hardest-to-find billionaire is “someone who quietly sold a stake in a business for $250 million in the ’90s, then invested it well.” For more stories about that kind of billionaire, you’ll have to read our book!

We looked at the backgrounds of the NFL owners for each of the teams playing this weekend (and the two #1 seeds who got the coveted bye). We ranked each team on a scale of 0 to 10 in terms of the origin of the ownership’s wealth as being derived from a Main Street-style business, as opposed to coming from tech or finance. We gave higher points to teams owned by first generation Main Street Millionaires (MSM).

Here’s what we learned:

Let’s start with the Denver Broncos in the #1 AFC slot. The Broncos are owned by the Walton-Penner group, rooted in Walmart wealth. Sam Walton graduated from the University of Missouri in 1940, gained some department store management experience at JCPenney, served in the Army in WWII, and came back to buy a discount store in 1950. He opened his first Walmart in 1962 in Rogers, Arkansas. The rest is history, but the point is that Walmart started out very much as a Main Street business but grew to a size that it no longer flies under the radar. Indeed, the heirs of this fortune fueled not only the owners of the Broncos, but also the Rams. (MSM Score: 6)

The New England Patriots owner Robert Kraft also has Main Street Millionaire origins. He worked for his father-in-law, who owned a paper and packaging company. Kraft acquired it in 1968 and expanded the business to become a huge exporter. (MSM Score: 8)

We profile the Jacksonville Jaguars owner Shad Khan in the book – which you can pre-order here. He has an awesome story and definitely qualifies as a Main Street Millionaire. (MSM Score: 10)

The Pittsburgh Steelers illustrate a different path to wealth. The Rooney family’s fortune comes overwhelmingly from the Steelers themselves. The team was founded in 1933 by Art Rooney. Effectively, the Rooneys got in early to a protected market (professional football), held it indefinitely, let institutional rules (revenue sharing, ownership limits, and caps on new team entry) do the work of protecting them, and passed the growing business down. As an industry, pro football resembles other markets we study in the book, like beverage distributors, where institutional barriers to entry and decades of ownership create generational wealth. (MSM Score: 4)

The Houston Texans and Buffalo Bills ownership both derived their wealth from the energy business. Bob McNair struggled early, failed more than once, and eventually hit it big in power generation and energy infrastructure, selling to Enron. Terry Pegula struck it rich in natural gas during the fracking boom. (MSM Score: 6)

The LA Chargers are owned by the Spanos family. Alex Spanos built his fortune developing apartments and commercial real estate. Today the team is run by his son, and the franchise has eclipsed the original business as the family’s primary asset. (MSM Score: 6)

The story of Seattle Seahawks ownership is a classic tech story. The Seahawks were owned by Paul Allen, co-founder of Microsoft. After his death, ownership passed to his sister Jody. (MSM Score: 0)

The Chicago Bears are owned by the McCaskey family, descendants of George Halas, one of the founders of the NFL. Like the Steelers, the franchise is the fortune. But they also seem to be run like many of the family businesses we profile in the book, and these structures become especially interesting during generational transitions. Winning the birth lottery, that is being born into Main Street wealth, is a path we detail in the book (though we don’t have much advice on how to get there). (MSM Score: 4)

Philadelphia Eagles sit somewhere in between. Jeffrey Lurie drew on family capital tied to General Cinema, a movie-theater and media empire started by his grandfather in 1935, combined with financial sophistication and timing. Lurie himself was once a professor of social policy before joining the family business and later launching his own investment and media ventures. He bought the Eagles in 1994 for $185 million. Today the team is worth roughly thirty-five times that amount. (MSM Score: 4)

Carolina Panthers reflects the rise of finance. The Panther’s owner, David Tepper, made his money in distressed debt and hedge-fund investing. (MSM Score: 0)

The LA Rams owner Stan Kroenke built a real estate empire tied to shopping centers and land development, often adjacent to Walmart stores, aided by marriage into the Walton family. We profile several Main Street Millionaires who came to their fortunes through help from their spouses’ family business. (MSM Score: 7)

Ownership of the San Franscisco 49ers traces back to Edward DeBartolo Jr, who developed shopping malls and commercial real estate. Ownership later passed to his sister Denise DeBartolo York, and then to the next generation. The initial wealth came from classic Main Street-style real assets, but today the franchise itself does most of the compounding. This is inherited wealth layered atop a Main Street foundation. (MSM Score: 6)

Finally, the story of the Green Bay Packers stands alone. The Packers are publicly owned by fans and residents, none of whom can hold more than a few percent of the outstanding shares. Their structure is unique in the NFL and among major league sports teams in North America. We talk about some employee-owned companies in the book, which often come about when a retiring founder uses ESOPs (Employee Stock Ownership Plans). (MSM Score: N/A)

Want more stories like Shad Khan’s? Pre-order The Everywhere Millionaire here!

Today, Raising Cane’s operates over 900 locations generating $5.1 billion annually—an astounding $6.6 million per store, trailing only Chick-fil-A.

For more on Graves, here’s a podcast of Graves telling his story and a Forbes feature.

Source

With a full-time population of just 825—and at least four billionaires with homes—Cashiers has one of the highest concentrations of wealth in the country, according to data from Altrata, a wealth-intelligence firm. […]

A September article in The Wall Street Journal, disclosing the presence of four billionaire families, got the community talking. “People said, ‘Four? What an insult. We’ve got more than that,’” said Ann McKee Austin, who summered in Cashiers as a child and who co-developed, with her brother William McKee, the Wade Hampton Golf Club in the 1980s. “It attracts low-key people, not jet-set people,” said Austin.

[…]
But others believe there is reason to fear overdevelopment. “I’ve witnessed an overbuilding [at other clubs], where going to dinner or getting a tee time for golf almost became a lottery system,” said Hufstetler, who just bought the $12 million house in Cullasaja. He previously owned homes in Destin, Fla., and on Lake Oconee, Ga., that he sold when those areas became too crowded.

She became a nail technician to help her family make extra money after they moved to Atlanta in the 1990s. She opened her first nail salon nine months later, with a loan. She has been opening nail salons since. She also founded beauty schools too.

It’s pretty amazing that nail salons and beauty schools can put you in a 16,500 square foot “White House” worth $35 million. Only in America.

You can register here: https://shapingwork.mit.edu/events/stone-center-launch-event/