I do parties, I have a set rate for 10 kids and less, people get confused when you charge per each kid, espeically they may get stressed out if a sibling comes or some don't show up, then you are out money. After my party package, it is so and so extra per child, (for me, it is per half hour). I don't include the tax as an add on, just take it out later when I pay taxes b/c people don't like all the fees racking up. I charge a travel fee after 20 miles... but really I should do more like 15 miles, especially b/c of tollways! Most of the entertainment people I know do something similar. After $15 per child, you are still only making $7 a child. You are providing entertainment and the party favor, you could charge more than that, depending on how much others are willing to pay.
One tip, INSTEAD of taking a monetary discount for for 10+ parties, you should offer an incentive, such as a free animal accessory or something like a pinata or coloring book or even rub on tattoos that you can provide for a lower rate without taking a financial hit. I know if I provided discounts for 10+kids, I would make very little, since most parties I do have around 15 kids.
*Also, I require 25% of the party deposit up front. I email an invoice via paypal and they pay the remaining balance at the time of the party. It holds the party for them and they feel secure knowing I am not going to flake out on them.
You can see my prices and polices and such here;
http://www.everafterentertainment.com