Public debt and wealth concentration have co-moved persistently across advanced economies and historical periods, defying standard theories of wealth inequality, particularly given that rising inequality has coincided with falling real interest rates in recent decades. I develop a stylized Diamond model with household heterogeneity and progressive taxation to formalize how public debt, through its tax burden, endogenously dictates tax progressivity and thereby affects the wealth distribution. In this framework, permanent debt shocks alter tax progressivity depending on the macroeconomic regime, with debt expansions increasing progressivity when interest rates are high but reducing it when interest rates are low. […]