“What is the number one industry in terms of generating profits for people in the top 1% who are business owners? And is that tech or finance? No, it's doctor's offices. And then the next one, you're like, what is that one? And it's like, oh, some beer distributor. Oh, the next one is, what is that? Oh, it's auto dealers.”
The Pie: An Economics Podcast · October 2026
Zwick describing the moment confidential IRS data showed where top-1% business income actually comes from. He says pass-through income from mundane 30-to-50-person businesses drove more than half the rise in the top 1% income share since the late 1980s.
Transcript
…of the businesses that are generating it? And that's what we were able to do in our data project is sort of make that connection for the first time at scale for all the businesses in the economy, basically, especially this emerging class of private businesses that people hadn't previously studied.
So as you were in the basement, what was the moment that this clicked for you when you kind of first linked, okay, here's a business tax, a business's tax filings, and here's the actual person who owned it. And you thought, wait a minute, there's a bigger story here than we thought.
Yes. So it was a series of years of projects, research papers, where you're kind of using the questions to try and pull back a layer of the onion, pull back another layer of the onion. One of the first realizations was, okay, everybody's talking about income inequality and its rise. But we don't know exactly how it's happening and where it's coming from. So one thing we did quite early on was say, okay, the top 1% income share, it's gone up since the late 1980s a lot. This is in Piketty's work. Where is that coming from? It turns out just the categories of income driving it, it's not salary and bonuses. It's not dividends and rents from like large public companies either or from real estate. It's pass-through business income. So it's income coming from businesses that people own. That's driving more than half of the rise of the top 1% share from the late 1980s through to 2021, 2022. And it's even more important if you move above the top 1% to the top 0.1%. Almost all of them are these private business owners. So that was one realization. Okay, that's pretty interesting. We have to understand this…
Once you had done this with this confidential IRS data, you had to find a legal way to put faces to the numbers for the book without breaking anonymity. So you turn to things like, and you referenced this already, you know, the private jet, the yacht ownership registries, since those are public.…
Yeah, exactly. So, I mean, this is one of the really fun things we do in the book. It's almost like a how-to to find these people. They're like lurking all around us. You don't even realize it. You're like economic detectives. We're totally in that's the tax ninja thing, right? You're sort of like…
Let's see if I can get a small business loan.
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