Question

A tax schedule’s burden is judged by the effective rate each household actually pays, not by the headline percentage printed in the statute.

Under a progressive schedule, income is sliced into brackets and each slice is taxed at a higher marginal rate than the one below it. A household earning 38,400 a year may pay an effective 9.4%, while one earning 214,000 pays 27.6% — the rate climbs with capacity to pay.

A flat consumption tax applies one rate to every purchase, so on paper it treats all buyers identically. The difference shows up in what share of income gets spent rather than saved.

Lower-income households spend nearly all of what they earn, so almost the whole paycheck passes through the taxed channel. Higher earners save or invest a large slice of theirs, and savings are never touched by a tax levied at the register.

The result is an inverted effective rate: a household living on 31,500 might surrender 6.8% of income to the tax, while one living on 260,000 surrenders 2.1%.

So the labels describe outcome, not intent. A schedule is progressive when the effective rate rises with income, regressive when it falls, and proportional when it holds flat.