> And then once you have it, there's even less incentive to try to "move up" from there, because there's now a cliff in front of you. You have to make the whole jump in one go, because if you only take incremental steps, you lose eligibility for your subsidies.
I don't know about other places, but I think this is a major issue in France. Many things stop altogether if you get above a certain limit of income. So many people end up working for minimum wage, because if they got 1 € more, they start "qualifying" for more taxes, lose access to social programs, etc.
This is much easier to deal with in "money payments" (you just make sure that every dollar extra you earn doesn't "cost" you more than fifty cents by having graduated wind down of payments) but can be much harder with things like programs that give you actual things, like housing or food.
It can still be implemented (not by saying "if you make more money, you'll only get 29 days a month of this house" but making the cash subsidy for the housing explicit and able to be wound down) but it really has to be thought through.
You really want some way for lower income people to move to middle income without having to give up their neighborhood, friends, everything. But if the neighborhood is entirely "working poor" and "filthy rich" you can't.
I completely agree. But somehow, I can't shake off the feeling that the unbelievable complexity in all things tax-related (and I include social programs therein) is a feature and not a bug (as in, it's intentional).
I don't know about other places, but I think this is a major issue in France. Many things stop altogether if you get above a certain limit of income. So many people end up working for minimum wage, because if they got 1 € more, they start "qualifying" for more taxes, lose access to social programs, etc.