America’s hidden millionaires are not concentrated only in Silicon Valley, Wall Street, or the ranks of famous billionaires. Tax-record research points to a much larger class of wealthy Americans who built fortunes through privately owned businesses, including law firms, medical practices, car dealerships, restaurants, consulting companies and manufacturers.
Economists Owen Zidar of Princeton University and Eric Zwick of the University of Chicago examine that group in their new book, arguing that private-business owners are central to understanding wealth and inequality in the United States.
The researchers define rich households as those with at least $5 million in net wealth. They estimate that about 3 million wealthy private-business owners belong to the group they call “Main Street Millionaires,” with average wealth of roughly $25 million. Taken together, the authors estimate, those owners hold more than 13 times the wealth of the Forbes 400.
Why America’s hidden millionaires matter beyond the Forbes 400
Their findings grew from more than a decade of work using administrative tax records linking millions of businesses with their owners.
Earlier research by Zidar, Zwick and other economists found that “pass-through businesses,” whose profits are generally reported on owners’ individual tax returns, expanded sharply over recent decades. Their share of U.S. business income rose from about 21% in 1980 to more than half by 2011.
That shift also changed how economists viewed rising top incomes. Pass-through income was heavily concentrated among high earners and became a major contributor to income growth at the top.
A 2019 study also found that profits at owner-dependent pass-through firms fell by about three-quarters after an owner retired or died, suggesting that much of the income reflected the owner’s skill, reputation, and management, not only invested capital.
Tax rules accelerated the pass-through shift
Tax policy helped accelerate the change. The Tax Reform Act of 1986 lowered individual tax rates relative to corporate rates, increasing the incentive for some businesses to use pass-through structures. The Congressional Budget Office has also identified the law as an important factor, while noting that other legal and economic changes contributed.
The 2017 tax law later created the qualified business income deduction, allowing eligible taxpayers to deduct up to 20% of certain business income. A 2025 law made that deduction permanent, though limits still apply to some high-income professionals and other businesses.
Zidar and Zwick say the group’s significance extends beyond taxes. Their book says wealthy business owners are spread across communities nationwide and are heavily represented in elected office.
It also examines industries where regulation can protect established businesses from competition, including auto dealerships, real estate brokerage and alcohol distribution. Federal competition authorities have separately raised concerns about some restrictions in those sectors.
The Research avoids a simple hero-or-villain story
Zwick has resisted describing the group simply as heroes or villains. “They are the protagonists,” he said, adding that some are protagonists “in the same way Tony Soprano is a protagonist.”
The larger finding is that some of the most important fortunes in modern America were built not by celebrity billionaires, but by owners of ordinary-looking businesses operating across the country.
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