Coding hard cut-offs like this into legislation, regulation or policies seems crazy almost to the point of negligence, incompetence or malice. Especially when it's so obvious such cliffs will incentivize behavior certain to cause negative or perverse outcomes. It's even more incomprehensible when implementing graduated thresholds is so well understood.
A related common failure mode is baking in fixed, absolute thresholds for dynamic domains sure to evolve instead of linking thresholds to dynamic metrics (such as inflation, cost of living, etc).
If it were, why would they offer welfare programs at all? Surely an "indolence tax" assessed on anyone with income below a certain threshold would be more cruel.
Don’t give them any ideas. Roughly half of US politicians would probably support that. Without constitutional safeguards, a shocking number of them would support turning their opponents into Soylent Green.
(For those playing at home this is a slogan tossed around with connotations of society wide rebellion - which would not be a comfortable outcome for rich people.)
It's frankly amazing that we still have welfare, social security, etc., at all. The pro-cruelty folks have been diligently working to discredit them since FDR enacted them during the great depression.
This unthinking encoding of thresholds feels like a 'Systems' problem that percolates into almost every part of life, whether its income brackets or hard limits on how many books you can borrow from the library. Some make more sense than others, just out of the sheer complexity and cost of implementing continuous (e.g. tapering) systems in the real world.
A particularly troublesome example I encountered, entirely unrelated to finance, was when working on a renal ward in hospital, we had to count respiration rate and input it into the obs machine, but if you inputted over 16, it would increase their sepsis score (or "acute deterioration"), meaning there'd be additional work to be done. It was rarely the case that they were actually producing symptoms of sepsis, but because of the hard threshold, to my horror, nurses would often just enter 16 on the mark, and juniors like me were told to do the same.
I'm sure there are literally tonnes of examples of these discontinuities and the bad incentives they produce across every industry and government function. In addition to laziness and inertia, I feel a general problem is that lack of curve/distribution/continuous-thinking in our schooling, as opposed to the easier discrete thinking.
All systems are fundamentally analog in nature. If only we just taught things this way...
A related common failure mode is baking in fixed, absolute thresholds for dynamic domains sure to evolve instead of linking thresholds to dynamic metrics (such as inflation, cost of living, etc).