As Cecil commented in this column:
That’s one decent argument for why income tax should be progressive. But another argument, which I don’t hear put forth nearly as often, is that it’s inherently more fair for the overall tax structure (income tax + sales tax + property tax + whatever) to be progressive.
That is, even if it were true that everyone pays about the same percentage of their income in total taxes, that wouldn’t be fair, because the marginal utility of a dollar goes down the more dollars you have. If you’re poor, losing, say, 20% of your income might be a crushing blow, with a great affect on your quality of life. But if you’re rich, losing 20% of your income isn’t going to affect your lifestyle nearly as much.
Wouldn’t the most fair tax system be one in which the cost to everyone (in terms of total utility, or affect on their quality of life) is equal? In other words, a tax which is “flat” in terms of utility, but highly progressive in the usual “cents paid per dollar earned” sense.