With 36.2 million small businesses employing 45.9 percent of private-sector workers, owners are the engine of the economy and a large part of the high-earning population. This feature looks at what that means for planning, from the top 1% income line to the coming wealth transfer, with commentary from a New Orleans tax attorney.
By Dr. Tamara Patzer
Economists track wages, spending and productivity. They count owners too, though less often as people with personal balance sheets that need planning. That is a gap worth closing. New Orleans tax and estate attorney Todd M. Villarrubia argues in his book, Entrepreneurial B.E.A.S.T. Mode™, that how owners hold and pass on their companies is not only a family matter. It shapes who employs people, who pays tax and what happens to businesses when the founder steps aside.
How big is the owner class?
The U.S. Small Business Administration’s Office of Advocacy counts 36,207,130 small businesses in the United States, about 99.9 percent of all businesses1. Together they employ 62.3 million people, or 45.9 percent of private-sector workers1. Those are February 2026 figures from the agency.
Not every small business owner is wealthy, and most are far from the top earners. The point is narrower. Some of the households that reach the top of the income scale in a given year are owners, since a business sale, a profitable year or a large distribution can produce income that wages rarely do.
What does it take to reach the top of the income scale?
Less than the popular picture suggests. For tax year 2023, a filer needed about $676,000 of adjusted gross income to land in the top 1%, according to the Tax Foundation’s analysis of IRS data2. That group paid about 38.4 percent of all federal individual income tax2.
Villarrubia’s opening chapter makes the same point: the threshold is lower than many believe. For an owner, the consequence is that tax planning is a standing business function, not an annual scramble.
Why does the structure of ownership matter to the economy?
Because it decides what survives a shock. Villarrubia’s rule is to keep separate risks in separate entities. A company that holds its real estate, its brand and its operations in a single legal entity can lose all three to one claim. A company that separates them has a better chance of continuing to employ people after a lawsuit.
He goes further in his chapter on structure: “Structure is not merely an accessory to success; it is essential for its long-term survival.” The claim is about owners, but the effect lands on employees, customers and lenders.
None of this works on paper alone. Courts can look past separate entities when owners mix money or ignore formalities, so the separation has to be real and maintained.
What happens when a generation of owners retires?
A very large transfer. Cerulli’s estimate is that $124 trillion will move between generations in the U.S. through 2048, roughly $105 trillion to heirs and $18 trillion to charity3. A good share of that will be closely held companies and the real estate beneath them.
Here the economic and the personal meet. Villarrubia warns that “The empire doesn’t fall from competition but from internal confusion.” A business without a succession plan can lose value in the transition even if its market is healthy. For the workers who depend on it, the cost shows up as a sale at a discount, a closing or a change in ownership nobody planned.
Where does the average family fit in?
The Federal Reserve’s 2025 Survey of Consumer Finances, released October 9, 2026, put median family net worth at $215,900 and mean net worth at $1.24 million4. The mean is more than five times the median, a sign that a small number of large balance sheets pull the average up4. Some of those balance sheets belong to owners.
That is why planning matters beyond the family. The assets that sit in a few hands are the same assets that employ and invest in everyone else. When they are poorly structured, fragments of them can be sold off, litigated or taxed away.
Why should lenders, partners and employees care?
Because they are on the other side of the owner’s decisions. A lender is repaid from a company that has to survive its owner’s death or retirement. A partner shares a business with someone whose estate plan may give a stranger a stake. An employee depends on a company that either has a successor or does not. None of them can see the plan, which is part of why a lack of one is easy to miss until it matters.
Villarrubia’s book makes a related point about stewardship. A transfer of ownership is only the legal part. The harder part is whether the people receiving the company understand how it works and why it was built.
What would good planning look like at scale?
Planning at scale is not complicated, though it is not quick. It usually covers four things:
- Separating risks into different entities and keeping the separation real.
- Coordinating advisers so tax, law, investments and insurance point the same way.
- Planning the transition years ahead of the event, not after it.
- Explaining the reasons behind the plan to the next generation.
The book’s reasoning is that disorder grows along with the size of the asset. A small business can run on improvisation. A larger one cannot, and the cost of improvising grows with the asset.
What does this mean for an individual owner?
That the national picture is made of household decisions. When an owner decides to formalize a structure, hire a second adviser or write down a succession note, the effect is small and local. Multiplied across millions of owners, those choices shape how wealth is held and passed on. An owner who wants to do the same for their own household can start with the simplest step: list what is owned, by whom, and who would act if the owner could not.
Common questions
Are most small business owners among the top earners? No. The group is a small fraction of owners. The article’s point is that the owners who are in it face planning questions that many do not expect.
Is this about policy? No. It describes published data and one attorney’s views and takes no position on tax policy.
Do the figures change? Yes. Each is tied to the year and source cited.
Sources
- U.S. Small Business Administration, Office of Advocacy, Frequently Asked Questions About Small Businesses 2026
- Tax Foundation, Who Pays Federal Income Taxes? Tax Year 2023
- NAPA-Net, Wealth Transfers Expected to Hit $124 Trillion Through 2048 (reporting Cerulli)
- Federal Reserve Board, press release on the 2025 Survey of Consumer Finances
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™. Wealth Planning Law Group, 101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124. Phone: 504-982-8207; email: todd@lawealthplan.com; website: https://lawealthplan.com/?utm_source=newsanchored&utm_medium=economic-insider&utm_campaign=top-1pct
Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
