Economists Owen Zidar and Eric Zwick have published research identifying a significant population of wealthy Americans whose riches are derived from local, private businesses rather than technology or finance sectors. In their book "The Everywhere Millionaire," the researchers analyzed Treasury and Internal Revenue Service (IRS) data to match tax records with individual business owners, finding approximately 5 million households in the U.S. with a net worth of at least $5 million.
The study describes these individuals as "everywhere millionaires," noting that their combined wealth is more than 13 times that of the Forbes 400. Zwick, a professor at the University of Chicago Booth School of Business, stated that this group includes 3 million owners of private businesses with an average wealth of approximately $25 million. Unlike the 1990s "Millionaire Next Door" archetype of frugal savers, Zwick and Zidar found that many of these business owners possess tangible luxury assets such as yachts and large houses.
According to the data, about 75% of these millionaires started their own businesses rather than inheriting them, and the vast majority did not inherit their money. The typical individual in this group is 62 years old, married, and likely to hold a college degree, though the researchers noted the degree rate is not significantly higher than that of the general population. The businesses involved are often "brick-and-mortar" enterprises, such as HVAC contracting, dentistry, or food distribution.
The research highlights the role of "pass-through" business structures, such as sole proprietorships, partnerships, and LLCs, in wealth accumulation. These structures allow business profits to flow directly to the owner's personal tax return, which avoids the double taxation typically associated with corporate taxes. Additionally, these owners can often deduct 20% of that income from their taxes, a benefit Zwick said allows them to accumulate wealth more effectively than employees who receive a standard W-2 paycheck.
Zwick cited Dick Portillo as a representative example of this phenomenon. Portillo began a hot dog stand in 1963 with an $1,100 investment, eventually expanding the business into a regional chain that he sold for $1 billion. Zwick argued that while artificial intelligence and new technologies may change business operations, the demand for tangible services like HVAC will remain, providing continued opportunities for wealth creation through solving "real-world problems."
For the broader workforce, the data illustrates a divergence in wealth accumulation methods. While many workers rely on 401(k) savings, the "everywhere millionaire" path relies on business equity and tax-advantaged income flow. The scale of this group—5 million households—suggests that regional economies are heavily influenced by local enterprises rather than just coastal financial hubs. A resident in any given district may notice the presence of these individuals through local service fleets, construction firms, or professional offices that serve as the primary engines of local high-net-worth growth.
The long-term impact involves the continued viability of the "American Dream" narrative and the persistence of tactile service industries despite technological shifts. As long as pass-through tax benefits remain in the tax code, this path to wealth remains a distinct legal and financial track for those starting new enterprises. The next steps for this research involve monitoring how technology like artificial intelligence integrates into these traditional service sectors. No specific legislative deadlines or upcoming court dates were reported regarding changes to the pass-through tax deductions mentioned.