The "kiddie tax" specifically refers to a tax rule designed to prevent parents from transferring significant amounts of unearned income, like investment income, to their children to take advantage of the child’s lower tax rate. If a dependent child has unearned income above a certain threshold, it will be taxed at their parents' marginal tax rate instead of their usually lower rate, as per this rule. The tax system ensures fairness and prevents exploitation of lower tax brackets by doing this. Here is an illustration to explain it through calculations.

• A 16-year-old dependent child, "J", earns $5,200 from his part-time job and $4,200 from stock investments.
• J's marginal tax rate is 10%.
• J's parents marginal tax rate is 35%.

We will find out from this example the tax rate on J's income tax for both earned and unearned income.

1. J's togal income is $9,400 ($5,200 + $4,200).
2. J's allowed stnadard deductios are $2,500 ($1,250 + $1,250).
3. To calculate taxes on both unearned and earned income, J has taxable income of $3,800.
4. Tax on unearned income will be calculated based on lesser of $1,700 ($3,800 - $2,500) or $3,800. Therefore tax on unearned income on parent's marginal tax rate is $595 ($1,700 x 35%).
5. Tax on earned income $210 ($3,800 - $1,700) x 10%.

Therefore total tax J is subject to pay $805 ($595 + $210).