The American Dream isn’t what you think it is

Key Points:

• Economists Eric Zwick, Owen Zidar, and Danny Yagan uncovered that wealth in America is largely held by "everywhere millionaires"—owners of small to mid-sized pass-through businesses—rather than by well-known billionaires or tech moguls, with around 3 million such millionaires holding 13 times the wealth of the Forbes 400.
• Their research shows that these business owners are concentrated in mid-sized metros across the U.S., not just coastal elite hubs, and many are doctors, auto dealers, dentists, and beverage distributors who generate income through partnership structures often overlooked in wealth discussions.
• The 1986 Tax Reform Act unintentionally fueled this shift by lowering top individual tax rates and favoring pass-through entities, which now make up 95% of American businesses and employ half the workforce, linking business profits directly to individual tax returns.
• The book argues that everywhere millionaires wield significant political influence, comprising a large share of federal and state legislators, which helps maintain a system that favors their wealth accumulation, with bipartisan representation in Congress.
• Stories of entrepreneurs like Dick Portillo and Katlin Smith illustrate that building wealth through owning and growing businesses remains a viable path, though it requires relentless effort, contrasting with newer financial trends like crypto trading; meanwhile, the coming transfer of baby boomer-owned businesses presents both challenges and opportunities for wealth building.