Coming back from Door County a couple of weeks ago I was pulled over for speeding. 79 in a 65 zone. I was fined $200.50 and got 4 points on my license. Annoying but hardly a catastrophe. I’m not going to have trouble putting food on the table because of it. I’ll make my mortgage and pay all my bills. But then, I make a good living. I’m lucky. What about someone who doesn’t?
Would a $200 fine for someone who makes $20,000/year (1% of that person’s gross annual income) constitute a hardship? Damn right it would. That’s a significant chunk of their monthly income. Should they have been speeding? No, of course not. But should any fine create a catastrophic economic circumstance for them? No, it should not.
Would a $200 fine for someone who makes $200,000/year (0.1%) be a hardship? They’d hardly notice it in the long run. Sure, they might have to defer the purchase of a new TV or sofa for a month or two, but it wouldn’t prevent them from feeding their family that month.
So which is fairer? Even dollars or even percentages?
I would argue that even percentages make more sense. So let’s say that if you’re caught speeding, you have to pay 0.1% of your gross annual income. We know that the person making $20,000/year would pay $20. The person making $200,000/year would pay $200. But think about the person making $20,000,000. They would pay $20,000 in fines for the same ticket. It’s still 0.1% (a flat tax!) but the value of the fine is progressive and tied to income. Your ability to pay determines the value of your penalty.
Sound crazy? It’s not. It’s in practice today in Finland. In 2004 a wealthy heir to a Finnish sausage company was fined 170,000 euros for going 80kph in a 40kph zone.
The reason for such astronomical fines lies in Finland’s lofty ideals of egalitarianism. The nation imposes graduated traffic fines based on the wealth of the lawbreaker as well as the severity of the offense. This system, adopted in 1921, is intended to ensure “equal severity of the fine for offenders of different income and wealth,” according to a paper by Tapio Lappi-Seppala, director of the National Research Institute of Legal Policy. Traffic fines must hurt the millionaire as much as the minimum-wage worker.
So the relatively harmless $200 fine I got on the way back from Door County might have been more under this system. And I’m OK with that. Had I been a minimum wage worker, it should have been significantly less. And that’s what’s fair.