The motivation to do well comes from the fact that the more you earn, the more you take home, if we didn't have a penalative tax system, that is.
And its daft comparing it to the cost of a loaf of bread, you could take your arguemnt to the other extreme and suggest the likes of multi-millionaires should get tax credits, etc, In fact they do get the winter fuel allowance if they are pensioners. As for as I'm concerned, taypayers money should be used to help those in need, not to help people make life choices.
You give your own example, and I agree with you, its up to individual families to decide what they want, but if they choose to have kids, why should the state pay for that. I don't expect the state to buy me a bigger car or house, etc.
And the examples you give, however the monies split, they are hardly on the bread line.
But as you suggest, they shouldn't be penalised for doing well. Their reward comes because they have more in their pocket due to lower taxes being paid. Or do you think lower taxes should be funded by just penalising those at the bottom of the pay scale?