Final answer:
Inter-family gifts can reduce tax liability using gift tax exclusions and the progressive nature of the tax system, where higher rates apply to larger gifts. This progressive tax system collects more from those with higher incomes. Control over family finances affects household spending and children's health.
Step-by-step explanation:
Inter-family gifts can reduce a family's total tax liability by taking advantage of gift tax exclusions and the progressive nature of certain tax systems. For instance, if gifts were taxable at a rate of 10% for amounts up to $100,000 and 20% for anything over that amount, this would be a progressive tax.
Under such a tax system, those who give larger gifts and are subject to the higher tax rate likely have larger incomes, meaning the tax system aims to collect more from those who have the ability to pay more.
Additionally, when considering family dynamics, control of family finances plays a crucial role in household consumption, with implications for how tax and monetary assistance policies should be designed to effectively aid families.