Odd Lots · Friday, September 18, 2026
A new book, 'The Everywhere Millionaire,' by economists Owen Zadar and Eric Zwick, reveals that pass-through businesses, often framed as small businesses, are a major driver of wealth and income inequality in the U.S. The authors used IRS data to analyze these entities, finding that a disproportionate amount of income from them accrues to the top 1%.
“But as it turns out, a lot of these businesses are actually phenomenally large and very, very wealthy.”
“So pass-through businesses are. different than traditional corporations. So if you look at like a typical public company like GM, they're a C corporation. They face the corporate tax. So when they make profits, they have to pay the corporate tax. And then if they want to send money to individual investors, they have to pay dividends. Pass-throughs are a different part of the tax code where you don't have to face the corporate tax, just the profits and losses go directly to the owners.”
“So this income is among the most concentrated. So pass-through business income, 70% of every dollar pass-through business income goes to the top 1%. And if you look at the rise of income inequality, so like the famous graph, top 1% share of income from Piketty and Saez going back to the 1980s, more than half of the growth from that period of time to the 2021 is coming in the form of pass-through business income.”