Maybe I'm just misunderstanding, but you're talking as if the current system was consciously selected because of some inherent advantages it has over the altern

Maybe I'm just misunderstanding, but you're talking as if the current system was consciously selected because of some inherent advantages it has over the alternatives. I don't think that's really true, and I would argue that the high marginal tax rates on low-income people are less the result of a careful analysis of trade-offs, and more the result of a flaw in the incentive structure for law-makers (on-budget costs look worse than off-budget costs).