The point of transition falls at the high spot on the curve. Up until that point, increases in taxing, spending, legislating, and regulating can provide gains. But beyond that point, the accumulated benefits begin to be offset by growing detriments. With each of the contrivances that humanity uses, whether a tool or an idea, there is always the temptation and the tendency to push its application to extremes, whereupon the advantages that were originally sought are reversed and disadvantages begin to occur. There are different types of reasons to account for the reversal effect in different areas of human endeavour.
Policies always cost resources to implement.
Furthermore, the costs are not just linear. One additional dollar spent will not always give one additional increment of program output. Instead there is the onset of diminishing returns to scale and to scope. Performance improvements start to cost more and more to achieve smaller and smaller gains. So both absolute amounts of dollars, and their relative efficiency to purchase results, are limits on the policy thrust.