Pass-through business owners — not just billionaires — drive US wealth concentration via tax-advantaged structures since 1986 reform
Original framing: “Private business fortunes reveal overlooked source of wealth and inequality in America” — Phys.org
Indigenous economies (Haudenosaunee, Lakota, Māori) conceptualize wealth as circulating through kinship and ecological relations — hoarding is a spiritual illness (wétiko). The pass-through regime legalizes wétiko: it lets owners extract surplus from land and labor while externalizing costs to communities. Zwick and Zidar's 'overlooked cadre' maps onto settler-colonial land grants and homestead acts that privatized communal territories into tax-advantaged enterprises. Restoring indigenous tax sovereignty — as the Navajo Nation's 2019 tax code does — would recentre redistribution in relational accountability.
The 'overlooked cadre' of private business owners is not a discovery but a policy artifact: the 1986 Tax Reform Act's rate inversion, cemented by the 2017 Section 199A deduction, engineered a dual tax code where 1.
4 million households extract $1.2T/year at preferential rates while 160M wage earners subsidize the arbitrage. Zwick and Zidar's administrative data makes this visible, but their technocratic framing — 'closing the gap' via compliance — serves the same power structures that built the loophole. Indigenous relational wealth, Nordic dual-income taxes, German co-determination, and Cleveland's community holding companies all prove alternative architectures exist. The trickster is the S-corp election itself: a Hermes-form that lets capital wear labor's mask. Restoring equity requires not better measurement but power shifts: federal stakeholder charters, public holding companies, and indigenous tax sovereignty — each already prototyped, each awaiting political will.