What best describes the nature of consumption taxes?

Consumption taxes are primarily considered to be regressive because they tend to take a larger percentage of income from lower-income individuals compared to high-income individuals. This occurs because individuals with lower incomes spend a larger proportion of their earnings on taxable goods and services. As a result, while a higher-income individual may not feel the impact of a consumption tax as significantly—since their basic needs constitute a smaller fraction of their income compared to luxuries—they still pay the same tax rates on the goods and services they purchase. This characteristic leads to an overall tax burden that disproportionately affects those with lower incomes, making consumption taxes regressive in nature.

The other choices describe characteristics that do not align with the general understanding of consumption taxes. While some may argue for equity in terms of consumption, it is typically the case that lower-income households are more severely impacted by such taxes relative to their income. Therefore, the characterization of consumption taxes as regressive is the most accurate reflection of their impact across different income levels.