Quick Read
Auto dealers rank as the #1 source of pass-through business income among America's top 1%, beating tech founders and hedge fund managers.
State franchise laws hand dealers protected local monopolies, letting a single-brand family store sell for hundreds of millions of dollars.
Zwick's mnemonic for the real 1%: A is auto dealer, B is beverage distributor, C is contractor, D is dentist.
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.
Learn 7 Ways To Generate Income With A $1,000,000+ Portfolio
If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
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.
Story Continues