The academia reaches the consensus about Engel’s Law, and most of existing researches focus on the external influence factors of Engel’s Coefficient. This paper has proposed the paradox situation for the consensus Engel’s Law. The qualitative and quantitative methods such as mathematical derivation are used to verify the paradox situation based on the essential relationship between Engel’s Law and the Income Elasticity of Demand. Then, this paper has adopted Fixed Effect Model and Random Effect Model to analyze the internal mechanism of Engel’s Law paradox situation by following the theory of Income Inequality Decomposition and by the panel data of income source. Finally, the paper draws a sub-income mechanism of action that supports the paradox situation of Engel’s Law.