Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive. Regressive and progressive taxes impact high- and low-income earners differently, whereas proportional taxes do not. Property taxes are an example of a regressive tax; the U.S. federal income tax is a progressive tax example; and occupational taxes are a type of proportional tax.
Regressive taxes have a greater impact on lower-income individuals than on the wealthy. Proportional tax, also referred to as a flat tax, affects low-, middle-, and high-income earners relatively equally. They all pay the same tax rate, regardless of income.
A progressive tax has more of a financial impact on higher-income individuals than on low-income earners, with tax rate, and tax liability, increasing, in line with a taxpayer's income. Investment income and estate taxes are examples of progressive taxes in the U.S.