Forget Tech Billionaires. Economists Say Car Dealers Are the Number One Source of Top 1% Pass-Through Business Income

On a September 18, 2026 episode of Bloomberg’s Odd Lots, “There’s a Mind-Boggling Number of Rich People in America,” University of Chicago Booth economist Eric Zwick, co-author of The Everywhere Millionaire, said that when he and his co-author zoomed out to rank the industries generating the most pass-through business income among the top 1%, “the auto dealers were the number one bucket,” adding that this “is not the Piketty story of like billionaire tech or finance.” His co-author is a professor of economics at Princeton.

What Pass Through Income Actually Captures

Pass-through business income is money earned through S corporations, partnerships and sole proprietorships. Instead of being taxed at the corporate level, the profit flows through to the owner and is reported on that owner’s personal tax return. It is the tax structure that sits underneath the vast majority of privately held American businesses, from law partnerships to franchised car lots.

Zwick’s ranking is an industry-level sort of where that income originates for filers in the top 1% of the income distribution. It is a measure of where the concentrated dollars actually come from once you strip out W-2 wages and corporate dividends, separate from any headcount of dealers or revenue tally.

How concentrated is that top slice? Per IRS Statistics of Income Publication 1304 covering tax year 2022, filers landed in the top 1% at an adjusted gross income floor of $663,164, and that group accounted for 22.4% of total AGI and 40.4% of total income tax. Pass-through profits are the dominant engine inside that cohort. Zwick and his co-author note that more than half of the growth in the top 1% income share from the 1980s through 2021 came in the form of pass-through business income.

Why Car Dealers Sit at the Top of the List

The mechanism is regulatory. State franchise laws grant licensed dealers protected local territory, which functionally hands the incumbent a local monopoly over new-vehicle sales for a given brand. Automakers cannot easily open a competing store down the street, and they cannot sell direct in most states. That legal moat converts a mid-market regional business into a durable cash machine, and it is why a family can sell a single-brand store for hundreds of millions of dollars.

The authors also had to solve an identification problem. Tax records are anonymized, so knowing an industry ranks first does not tell you who the owners are. They ended up finding these owners by name through yacht and jet registration data, cross-referencing the rough signatures they already had from the tax data. As one illustration of scale, the authors point to the Brockway family, who spent $60 million on a Paris wedding after selling their Mercedes dealership for several hundred million dollars. And the authors note the Brockways are not even close to the most prodigious dealers in the country.

Why This Matters if You Will Never Own a Dealership

The reframe is the point. The dominant public narrative about the American 1% is a story about tech founders, hedge fund principals and public-company executives. Zwick’s tax-data ranking says the mass of concentrated income actually sits with owners of mid-market regional businesses, of which there are millions across the country. The authors’ mnemonic, only half joking, runs A is for auto dealer, B is for beverage distribution business owner, C is for contractor, D is for dentist.

For investors, that changes what you look at when you think about the plumbing of American wealth. Policy debates about the corporate rate, the qualified business income deduction, or state franchise protections land directly on this cohort. Debate over dealer-direct sales, an ongoing fight involving several electric vehicle makers, is a fight over the exact legal structure that put auto dealers at the top of Zwick’s ranking in the first place.

The tax data is what it is. The single largest industry pool of pass-through income at the top of the American distribution sits behind the sales floor of the local franchised dealership, protected there by state law.

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