ANN ARBOR – A growing number of millionaires and billionaires are publicly urging governments to raise taxes on the world’s wealthiest individuals, arguing that extreme inequality threatens economic stability, democratic institutions, and long-term growth.

In an open letter released alongside global economic forums, wealthy signatories warned that current tax systems allow vast fortunes to accumulate while public finances weaken — a dynamic they say is no longer sustainable.

Their argument points directly to policy choices made over the past decade, particularly in the United States, where large tax cuts coincided with soaring federal deficits, rising national debt, and record-high interest payments.

Trump’s Tax Cuts as a Case Study

The most frequently cited U.S. example is the 2017 Tax Cuts and Jobs Act, signed into law by Donald Trump.

The legislation:

  • Cut the corporate tax rate from 35% to 21% (permanent)

  • Reduced individual income tax rates (temporary)

  • Weakened the Alternative Minimum Tax

  • Created a 20% deduction for certain business income

Supporters argued the cuts would spur investment and growth. But independent budget analysts found the law reduced federal revenues by more than $1 trillion over its first decade, even after accounting for economic growth.

More importantly, the benefits were not evenly distributed.

Who Gained the Most

While most Americans saw modest tax relief, high-income households captured the largest gains by far.

By the mid-2020s:

  • The top 10% of earners received nearly half of all tax savings

  • The top 1% alone captured about one-fifth

  • Lower- and middle-income households saw far smaller dollar benefits

That imbalance is why today’s calls for higher taxes on the ultra-wealthy often reference Trump-era tax policy as an example of how tax systems can amplify inequality.

The Deficit Reality

Tax cuts do not exist in a vacuum.

Because Congress did not pair the TCJA with equivalent spending reductions, the federal government borrowed more to cover ongoing obligations.

he result:

  • Annual U.S. deficits near $1.8 trillion

  • A national debt approaching $38 trillion

  • Debt roughly equal to the size of the entire U.S. economy

This borrowing is no longer cheap.

Interest Payments Are Now a Budget Giant

In fiscal year 2025, the U.S. government spent about $970 billion just on interest payments — money paid to investors who hold Treasury debt.

That makes interest:

  • One of the three largest federal spending categories

  • Larger than total defense spending

  • Roughly one out of every five dollars of federal revenue

Unlike infrastructure or education, interest payments produce no new economic value. They are the price of past borrowing.

As interest rates rose and debt piled up, interest costs became the fastest-growing line item in the federal budget.

Why This Matters to Business and Technology

For business leaders and tech investors, the implications are significant:

  • Less fiscal flexibility for government investment in infrastructure, workforce development, and innovation

  • Higher future tax pressure, as interest crowds out discretionary spending

  • Greater economic risk, as high debt limits the government’s ability to respond to downturns

This is the core concern raised by wealthy signatories calling for higher taxes: without more revenue from those most able to pay, governments risk locking themselves into a cycle of borrowing and rising interest costs.

The Bigger Question

The debate is no longer just about fairness.

It’s about whether a tax system that delivers its largest benefits to the wealthiest — while contributing to persistent deficits and exploding interest costs — is compatible with long-term economic growth.

That question now sits at the center of global fiscal policy discussions, and it will shape tax, spending, and investment decisions well beyond the next election cycle.