This will return the result you're looking for:
=SUMPRODUCT(--(A1>{0,250,500,750,1000}),A1-{0,250,500,750,1000},{17,-2,-2,-2,0})
Apparently the third set of numbers needs to be the difference from the previous rate, not from the original rate. I've never messed with this before this post, so I learned something new!