“America’s government gives benefits to the poor: food, health insurance, and (sometimes) housing. When the poor earn more, those benefits go away while they also pay more in taxes.”

The federal government purpose of the above is to provide humanitarian assistance to those who can’t afford to maintain minimal subsistence. When a person or family makes the transition from a tax receiver to a tax payer there are bound to be some inconsistencies. However, your comments illustrate why many choose not to attempt the transition. To leave the safety of being a welfare recipient there must be incentives. If available work opportunities lack sufficient benefits to raise the standard of living many of welfare will not take the risk of seeking employment. Also, similar problems would be associated with providing a universal basic income.