Economist Eric Zwick says car dealers top pass-through income source

Economists Rank Car Dealers Top Pass-Through Income Source

University of Chicago Booth economist Eric Zwick said on Bloomberg's Odd Lots podcast that auto dealers are the top source of pass-through business income for top one percent.

Zwick, co-author of The Everywhere Millionaire, also spoke on the September 18, 2026 episode alongside his Princeton economics professor co-author. He said the finding is not the Piketty story of billionaire tech or finance, but rather a different wealth pattern.

The ranking is an industry-level sort of where pass-through income originates for filers in the top one percent, separate from ordinary W-2 wages and corporate dividends.

According to IRS data for tax year 2022, the top one percent had an adjusted gross income floor of $663,164. That group actually accounted for 22.4 percent of total AGI and 40.4 percent of all federal income tax paid in 2022.

More than half of the growth in top one percent income share from 1980s through 2021 came as pass-through business income. Zwick and his co-author present this finding in their book The Everywhere Millionaire, which they discussed on Bloomberg's Odd Lots.

Pass-Through Income Drives Top One Percent Wealth

Pass-through business income is defined as money earned through the S corporations, partnerships, and sole proprietorships in the United States. This income is taxed on the owner's individual federal personal tax return rather than at the standard corporate tax level.

State franchise laws grant licensed dealers protected local territory, handing incumbents a local monopoly over new car sales for each brand, and automakers cannot easily compete.

The authors point to the Brockway family, who spent $60 million on a Paris wedding after selling their Mercedes dealership. They sold that dealership for several hundred million dollars, and the Brockways are not close to the most prodigious dealers.

The book contrasts this with Dick Portillo, who grew up in Chicago's Cabrini-Green housing projects and decades ago opened the first modest local hot dog business.

The practical takeaway is that local wealth engines in a normal American town, like regional HVAC contractors and dental practices, are more realistic than tech exits.

Franchise Laws And Duration Build Dealer Wealth

The dealer is rich because the state legislature simply made it effectively illegal for the new-car manufacturer to compete directly with him in most American states.

Portillo was rich because he simply outlasted every other local small hot dog operator on his entire neighborhood block for more than five very long decades.

The authors' mnemonic, only half joking, runs A is for the auto dealer, B is for beverage distribution business owner. C is for contractor, and D is for dentist, according to the economists' own playful very recent new industry ranking.

Portillo opened first stand without knowing how to make a hot dog, washing dishes by hand because it had no plumbing. He later died a billionaire with his large penthouse and a yacht named Top Dog, according to the recent new book.

The wealth engines in a normal American town are still more realistic paths to serious money than the tech exit, at the cost of many decades.