The Law of Unintended Consequences strikes again
It's not enough to *find* an anomaly . . .

Ladies and gentlemen . . . the American tax system!

Very few things reveal as consistently and as strongly the grave problems at the heart of our current political system. John Cochrane:

It all sounds great if you don't understand margins.  Why should the government help rich people? But every time we do cap something or means-test it, we introduce another marginal tax. And some of the biggest marginal taxes hit the poor. 

This is a deeply important point so let me reiterate it. If you means-test any benefit, you introduce a steep marginal tax rate at means-testing point. If you don't means-test a benefit, you blow out the budget. It's a hard nut, that you can't get around.

This is not a little problem. We worry about the distribution of income in the US, and how low-income people seem stuck. Well, faced with these barriers of course they're stuck. And the barriers are going to get worse.   

More, including "Welfare's Failure and the Solution," here.