If inflation goes to 20% it won't be a great rate.

I Bond rates are recalculated every 6 months. If inflation goes to 20%, the rate will be great. If inflation goes back down to 2%, not so much

Interesting.

Main constraint being $10k a year per person.

I’m actually really curious about this. I’m a bond-market ignoramus.

Is it capped because it’s a government subsidy to people who know that it’s a good deal? If so, wtf with the regressive tax?

Or is it capped because of some bond-math/bond-market reason that a novice would miss?

Effectively, yes. It's a subsidy to individuals of moderate means, particularly those who have spent decades maxing out their holdings.

If you think that's regressive and absurd, wait until you hear about the mortgage interest deduction, 1031 exchanges, depletion allowances, accelerated depreciation, ....

...and capital gains taxes, the carried interest loophole, the unlimited step up basis rule, private yacht tax deductions, and Texas...