Final answer:
The 'Kiddie tax' was enforced to prevent reducing tax liability through income shifting to lower-taxed children. The UK's policy in the 1970s of giving the child allowance directly to mothers raised questions about the impacts of income control. Inheritance taxes remain a contentious topic, reflecting differing views on earned versus inherited wealth.
Step-by-step explanation:
The 'Kiddie tax' concept was introduced to prevent parents from reducing their tax liability by transferring income to their children, who typically are in a lower tax bracket. This form of income shifting was attractive because it allowed families to decrease the amount of tax paid by allocating income to those subject to lower tax rates. The tax code changes under the Reagan administration, specifically within The Tax Reform Act of 1986, addressed various loopholes and tax shelter issues, including the requirement for parents to list social security numbers for each dependent to prevent fraudulent deductions.
Regarding whether who controls household income makes a difference, the policy change in the UK during the mid-1970s shifted the control of the child allowance from being deducted at source (traditionally from the father's income) to a cash payment given directly to the mother. This adjustment raised questions about spending patterns within households and the impact of income control on family dynamics and child welfare. It suggests that the controller of household finances can influence how that income is utilized, potentially affecting the well-being and development of children.
The topic of inheritance taxes often sparks debate around the balance between rewarding hard work and savings throughout one's life and addressing issues of inequality that may arise from substantial wealth being passed down through generations. These discussions reflect societal values regarding the sources of wealth and the merit of income earned versus inherited.