The Multimillionaire Myth: How Trump’s Tax Cuts Favor the Affluent Over America

When the House passed its version of Donald Trump’s One Big Beautiful Bill Act (OBBBA) last year, Speaker Mike Johnson declared that the beneficiaries of the massive tax cut were “small business owners” who provide jobs in every community across America. This narrative has become a staple of Republican rhetoric: the modest Main Street job creator fighting to make ends meet amidst unforgiving competition.

However, scratch beneath the surface, and the reality is starkly different. The pass-through businesses favored by Trump’s tax cuts are not struggling entrepreneurs but vehicles for millionaires to minimize their tax liabilities while maximizing their wealth. According to the Urban-Brookings Tax Policy Center, a staggering 57% of pass-through income in 2022 went to just 890,000 people in the richest 1% of the population.

Politicians like Johnson and Senator Ron Johnson (no relation) are often assumed to be immune from such self-serving interests. However, their own financial dealings reveal a different story. Mike Johnson’s $3.7 million townhouse is owned by millionaire Republican donor Lee Beaman, while Senator Ron Johnson has made millions through his plastics company and real estate investments.

What’s truly concerning is not just the money involved or the cozy relationships between politicians and millionaires but the impact of these tax breaks on American society as a whole. By allowing pass-through businesses to shield their profits from corporate income taxes, Trump’s tax cuts have effectively given wealthy owners a 29.6% top income tax rate – significantly lower than the 37% marginal rate faced by ordinary workers.

The result is a skewed economic landscape where Main Street millionaires are empowered while small businesses and entrepreneurs are left behind. Car dealerships dominate local economies, protected from competition by franchise laws and territorial restrictions that allow them to charge exorbitant fees to homeowners. Real estate developers profit from privileged access to listing information and monopolistic fees.

Economists Owen Zidar and Eric Zwick have studied the phenomenon of Main Street millionaires in their upcoming research. These individuals are not just local dentists or doctors but a class of affluent professionals, often worth tens of millions, who have organized themselves as pass-through businesses to minimize their tax liabilities.

The implications are far-reaching and disturbing. With the power to influence policy through political action committees (PACs) and individual donations, Main Street millionaires are increasingly shaping American politics – often in ways that benefit only themselves. Car dealership owners like Don Beyer from Virginia, Vern Buchanan from Florida, and Mike Kelly from Pennsylvania sit on key committees, where they can quietly advocate for policies that boost their own bottom line.

The issue goes beyond just tax breaks or economic inequality. The damage to American society runs deeper – as exemplified by the shortage of doctors in this country compared to our OECD peers. By freezing residency positions funded by Medicare in 1997, lawmakers effectively limited access to medical education and created an elite class of physicians who reap rewards not just from their profession but also from tax policies that favor pass-through businesses.

It’s time for Americans to confront the reality behind Trump’s One Big Beautiful Bill Act: a law designed more to enrich Main Street millionaires than to stimulate economic growth or support small businesses. The myth of the modest, job-creating entrepreneur has been exposed – and with it, the cynical manipulation of American politics by those who have the most to gain from it.