I agree with the premise of what you're saying here overall, on the contradiction you pointed out, and that sales tax is a regressive tax, and about the rich being a dominating minority etc.

One thing I'll add is that extremely wealthy individuals tend to have modest or even low income from wages, so relying on progressive income tax brackets alone still results in a tax system that is either flat, or not progressive enough. Progressive income tax is a smart choice but it doesn't go far enough IMO. Wealthy families gain an enormous amount of money from unrealized capital gains, dividends, and interest, all of which enjoy huge tax breaks.

At the risk of getting further off topic, sales tax tends to be regressive because lower income people have to spend all or almost all of their money on necessities, while rich people don't actually spend a significant % of their wealth at all. I'm in favor of the wealth tax that Elizabeth Warren has been advocating for. If wealth inequality is the problem then you tax wealth.

I think I remember a Last Week Tonight (John Oliver) episode about this kind of death spiral, years ago. Maybe it's making an impact.