Income Based Fines

[dazzleman]

What do you guys think of the Finnish system of assessing traffic fines?
____________________________________________________________

Sock it to the rich: Higher fines for cash cows.
BY PATRICK BEDARD
May 2005


Photo radar originally came from: (a) the CIA, (B) Microsoft, © Europe, or (d) the Sears, Roebuck catalog.

The answer is Europe, where highway robbery is the everyday business of government. Think of wolfish fuel taxes and prohibitive tariffs on engine displacements above three liters. Photo radar, as fiendish as it is, now seems so last millennium compared with a radical breakthrough in speed tax from the land of Nokia.

Finland, never mind the popularity of its cell phones, mostly exists in quiet obscurity. That changed when Nokia senior executive Anssi Vanjoki was handed his whopper speeding fine. The amount, converted from euros, was $12.5 million.

You could say he was really asking for it, what with blatting out potato-potato noises through Helsinki on his full-dresser Harley hog. And he was speeding, 75 kilometers per hour in a 50-km/h zone (translation: 47 mph in a 31). Moreover, he is a rich guy, which makes it okay in the minds of many Europeans to sock it to him.

But $12.5 million for 16 mph over?

This sum was sufficiently sporty to attract attention worldwide, and in so doing it put Finland's innovation in speeding fines into play among all the world's governmental money grubbers. Finland bases its fines on the speeder's ability to pay. Rich guys get reamed more than regular Johans.

Vanjoki's fine was reduced on appeal. The initial levy was based on his 1999 income; he cashed in a truckload of Nokia options during the dot-com boom. But the boom ended, and by the time of his 2001 speeding bust, his income had dropped. When all the paperwork finally caught up to the court, the final amount was ?6000 ($7800 today), this according to Helsingin Sanomat.

Vanjoki is not the only Finn to learn that driving while loaded can be hazardous to his wealth. His colleague, Nokia president Pekka Ala-Pietila, was fined ?35,000 for his speeding offense. Another dot-com boomer, Jaakko Rytsola, got two biggies in quick succession in his Lamborghini, one of them looking like ?50,000 initially. But then his shares tanked, and he declared bankruptcy.

Finland assesses its speeding fines in days of income, but the "days" part is just a technical detail. The key idea is to tap directly into the income stream. In the eyes of the social justice crowd, this approach is superior to equal fines for equal offenses because it achieves equal pain across the populace. Rich guys, they say, can just shrug off ordinary fines.

Sweden, Denmark, and Germany have a similar system with one critical difference. They set a ceiling on fines. Sweden's, for example, is $98. According to Australia's Sunday Mail in Brisbane, Britain and seven other European countries will soon introduce income-based fines for traffic and parking violations. The paper talks about the European situation because Aussie lefties are plumping for the same idea. Under one proposal, a motorist earning less than $30,000 annually would pay a $75 fine, and a $100,000 earner would pay $385 for the same violation.

As you might imagine, sock-the-rich traffic fines spark lively conversations on the Internet:

?"If a fine is mere petty cash to a rich person, there will be no deterrence, so it's reasonable to have fines calibrated to achieve similar deterrence for every level of wealth."

?"There are different reasons for punishment. Simple retribution is one: an eye for an eye. Equalizing retribution requires taking a bigger hunk from the rich."

?"These harsh fines actually benefit the rich. They are widely reported, and they advertise the wealth and daring of the person more than would the purchase of a Ferrari."

?"What you are actually suggesting is that the rich pay for the traffic offense and also pay for the offense of being rich. What happened to the idea that we're all equal in the eyes of the law?"

?"What the fines actually buy is a bit of public confidence that the speeder regrets his offense, and it costs more to get that regret from a rich person."

The rich have yet to weigh in on this topic. They are maintaining diplomatic silence, or, more likely, they have better things to do. But I can imagine how their lobbyists would spin the issue: "Low, low rates for deadbeats!" Or perhaps "Subsidized speeding for slackers!"

For us Americans, it's tempting to think that our Constitution and Bill of Rights will protect us from capricious revenuing schemes. We have the "equal protection" clause, after all. But I notice that constitutional safeguards haven't stopped photo radar. The right to trial? The right to be confronted by your accuser? Local governments have deftly sidestepped these provisions by slightly downgrading citations to less-than-criminal offenses?that eliminates the right to a trial?and by changing the laws so the car owner is responsible, never mind who was driving. This way zeros in on the money.

Photo radar is about money, pure and simple, and so is the idea of ratcheting up the take if they bag a?forget cash cow, think "cash whale."

If we had income-based fines, do you think the cops in Omaha could resist the temptation to hide behind trees with their radar guns on multibillionaire Warren Buffett's street? The revenuers of Medina, Washington, already get something over $1 million in property taxes from Bill Gates, but the important thing is they could get more if they had income-based traffic fines. On a driver who hauls in as much as Gates, a slap for as little as 10 over the limit would be major manna for the mayor.

For the few of you still resisting the idea that traffic fines are about grabbing the money, consider the case of Coburg, Oregon, population 969, which had a nice little growth business from radaring and lasering traffic on Interstate 5, never mind that no part of I-5 actually ran through town. The growth came from adding more motorcycle cops. The tickets were filed in Coburg Municipal Court, too, so the town could grab 100 percent of the fines instead of the 50 percent it would get from the state justice court.

"One officer grew so bold," according to the Oregonian in Portland, "that he took to writing out tickets before he left the police station and asked if he could requisition a rubber stamp for his signature."

When the Oregon state legislature passed a law specifically banning Coburg's game, the town annexed a 26-acre parcel just on the other side of I-5 and cranked up its ticket machine again.

Now just imagine the headlines if Coburg and other burgs of similarly rapacious yearnings had income-based fines: Highway Robbers Go Nuclear

[Run Away]

Well seing how I make like $12,000 per year, I'm all for it.


Don't think I'll be so enthusiastic when I'm making the big bucks though. I'd have to do some major tax evasion or something. Or write everything off as a buisness expense.

[ifcar]

If you consider it a tax rather than a fine, this policy does not stray much from many European nations'.

[saxonyron]

Socialism at its finest!  Considering the wealthy elite in Europe have the most to do with the government they have, so be it - they made their bed, now they can lie in it!  As far as being a legitimate form of punishment, I think it's absolutely retarded.  If you can afford the fines, then good for you.  The real sting of any speeding ticket situation is the eventuality that you could lose your license.  That's the biggest deterent.  And I imagine the court system wouldn't look too favorably on you, even if you could afford a big shot lawyer.

[dazzleman]

Socialism at its finest!  Considering the wealthy elite in Europe have the most to do with the government they have, so be it - they made their bed, now they can lie in it!  As far as being a legitimate form of punishment, I think it's absolutely retarded.  If you can afford the fines, then good for you.  The real sting of any speeding ticket situation is the eventuality that you could lose your license.  That's the biggest deterent.  And I imagine the court system wouldn't look too favorably on you, even if you could afford a big shot lawyer.

Good point Ron.

Not too many people really care about speeding fines, at least not to the point that the threat a fine, or the actuality of having been fined, would make them drive more slowly than they wanted to.  At least nobody that I know.

It is the greater penalties that will flow from getting bagged repeatedly in a short time frame that really deter people (or at least some people).

Administratively, something like this would be a nightmare to implement in our litigious society.

There is also the fact that different people perceive the same punishment differently, even if they have the same income.  It's all about spending priorities and tolerances.  Just as one person would not be willing to go to a restaurant that charges $35 for an entree, even if he can afford it, while another person of the same income will, there are some people who would laugh at a fine of $500 for speeding, as an example, while another person of the same income group would be devastated by it.  It all depends on the level of enjoyment that one derives from speeding.

This doesn't just apply to monetary penalties.  There are some people who consider a stint in 'the joint' to be a badge of honor and a necessary right of passage, while others would consider it the worst fate that could possibly befall them.

Also, income doesn't necessarily reflect wealth, so just relying on income to assess fines doesn't mean a person is being hit equally hard.  In the grand scheme of things, fines are insignificant in any case, so it just doesn't seem worthwhile to try to implement a nightmare system like this.

The bottom line is -- given personality and attitude differences, there is no way to 'equalize' the way different people perceive the penalties for the same offense.  It's just not possible.

[saxonyron]

This song comes to mind - Joe Walsh, about 1978 - "Life's Been Good"

My Maserati does 185
I lost my license now I don't drive.
I have a limo, ride in the back
I lock the door in case I'm attacked!

Awesome tune.  But it does underscore the fact that rock star Joe is bummed that he lost his license.  He doesn't cry about the fines he had to pay.  Besides, our legal system is based upon having the punishment fit the crime.  There is something damned Un-American about porking a rich guy $12 mil for a ridiculously minor traffic violation.  That is just sick on so many levels.  The politics of greed and envy take over in a socialist society.  Pretty soon, no one will want to take risks and build businesses and create jobs if they know the government will always be there to smack them down.

[dazzleman]

This song comes to mind - Joe Walsh, about 1978 - "Life's Been Good"

My Maserati does 185
I lost my license now I don't drive.
I have a limo, ride in the back
I lock the door in case I'm attacked!

Awesome tune.  But it does underscore the fact that rock star Joe is bummed that he lost his license.  He doesn't cry about the fines he had to pay.  Besides, our legal system is based upon having the punishment fit the crime.  There is something damned Un-American about porking a rich guy $12 mil for a ridiculously minor traffic violation.  That is just sick on so many levels.  The politics of greed and envy take over in a socialist society.  Pretty soon, no one will want to take risks and build businesses and create jobs if they know the government will always be there to smack them down.

That is an awesome tune, Ron.  I'm humming it in my head right now.  And it fit that whole era - our high school years - perfectly.

As far as your comments on socialism, I couldn't agree more.  Socialism effectively makes everything a political issue, and people think that they can simply vote themselves the economic outcomes that they want.  This mentality breeds laziness, and an unwillingness to work hard and take risks.  If you want to see the danger of this in action, you need look no further than the current situation in France.  In some parts of the USA, we are perilously close to this situation already, at least in certain realms (rent control laws are a good example -- political control of housing prices rather than market control).

[L. ed foote]

What do you guys think of the Finnish system of assessing traffic fines?

:monkey:




 

[L. ed foote]

The real sting of any speeding ticket situation is the eventuality that you could lose your license.  That's the biggest deterent.

I'm different in that I look at speeding as the ends justify the means.  I get ticketed, I get ticketed, it's no big deal.

FWIW, I've been nailed while driving with a suspended license...

[dazzleman]

The real sting of any speeding ticket situation is the eventuality that you could lose your license.  That's the biggest deterent.

I'm different in that I look at speeding as the ends justify the means.  I get ticketed, I get ticketed, it's no big deal.

FWIW, I've been nailed while driving with a suspended license...

Foote, have you ever found the fines you've paid to be a financial hardship?  Or do you take the position that it's money well spent, because you're doing what you want to do?

I tend to echo a lot of your attitude toward tickets, though your record is quite a bit more impressive than mine...    

[L. ed foote]

Foote, have you ever found the fines you've paid to be a financial hardship?  Or do you take the position that it's money well spent, because you're doing what you want to do?

If you really think about it, it isn't a financial hardship.  From getting stopped to appearing in court in front of a judge, I have at least 2-3 months to play with.  And that's if the case isn't postponed for whatever reason.  Meanwhile, after I face the judge, I have another couple of months to play with.  Stretch it out, and it could be about a year before the state sees my $$.

So I lay low, stay out the strip clubs and I have the money ready whenever.

I'm sure if I were pulled over a bit more frequently, it may be a hardship, but as it stands now, it's not that big a deal.

[L. ed foote]

On a related note, today my coworker told me I was "excessively cavalier"    

[dazzleman]

Foote, have you ever found the fines you've paid to be a financial hardship?  Or do you take the position that it's money well spent, because you're doing what you want to do?

If you really think about it, it isn't a financial hardship.  From getting stopped to appearing in court in front of a judge, I have at least 2-3 months to play with.  And that's if the case isn't postponed for whatever reason.  Meanwhile, after I face the judge, I have another couple of months to play with.  Stretch it out, and it could be about a year before the state sees my $$.

So I lay low, stay out the strip clubs and I have the money ready whenever.

I'm sure if I were pulled over a bit more frequently, it may be a hardship, but as it stands now, it's not that big a deal.

Yes, that's always been my answer to people who bellyache about speeding fines.

I could spend more than the cost of a speeding fine on a nice dinner out, and I do that far more often than I get nailed for speeding.

The fines I've paid over my entire lifetime don't amount to a hill of beans.

My attitude toward any type of penalty has always been colored by how much I enjoyed what I did to earn it.  Because I love driving fast, I've never minded paying fines for speeding.  I get the ticket, pay it, get back in the car, and keep speeding.

OTOH, I get pissed off paying fines for parking violations and stuff like that, when the infraction doesn't bring me any real enjoyment, even if the fine is quite a bit less than the one I would pay for speeding.

[dazzleman]

On a related note, today my coworker told me I was "excessively cavalier"  

Hah, that's pretty funny.  It's probably true, but it's part of the reason you're a cool guy to discuss these things with.

What led this person to say this to you?

[Rupert]

I'm not opposed to the idea, but there's no way to make it work well.

Coburg is just outside Eugene, my hometown. They're assholes.

[JYODER240]

Absolute BS, lets punish thoughs who have worked hard to have financial security by hitting them with higher fines. This makes about as much sense as forcing the upper class to pay a higher percentage of their income in taxes because they have worked hard and now have more money  

[Tom]

Absolute BS, lets punish thoughs who have worked hard to have financial security by hitting them with higher fines. This makes about as much sense as forcing the upper class to pay a higher percentage of their income in taxes because they have worked hard and now have more money

Uh...

[dazzleman]

Absolute BS, lets punish thoughs who have worked hard to have financial security by hitting them with higher fines. This makes about as much sense as forcing the upper class to pay a higher percentage of their income in taxes because they have worked hard and now have more money

Uh...

That's very enlightening Tom....  

[Tom]

Absolute BS, lets punish thoughs who have worked hard to have financial security by hitting them with higher fines. This makes about as much sense as forcing the upper class to pay a higher percentage of their income in taxes because they have worked hard and now have more money

Uh...

That's very enlightening Tom....

Thanks D-Man

I'm just not quite following Jyoder's logic.  I don't like Finland's ticketing system, but I wouldn't say it's the same as the rich having a different tax bracket than the poor.

[dazzleman]

Absolute BS, lets punish thoughs who have worked hard to have financial security by hitting them with higher fines. This makes about as much sense as forcing the upper class to pay a higher percentage of their income in taxes because they have worked hard and now have more money

Uh...

That's very enlightening Tom....

Thanks D-Man

I'm just not quite following Jyoder's logic.  I don't like Finland's ticketing system, but I wouldn't say it's the same as the rich having a different tax bracket than the poor.

It's similar in a way, but it's also dissimilar.

Even if everybody is in the same tax bracket, a person with more income will pay higher taxes than a person with less.  In that sense, the Finnish fine system is akin to a flat tax, if you want to look at it that way.

But a fine is not a tax, though it provides revenue to the government.  While taxes cannot be avoided legitimately other than by not having income, fines can be avoided by following the law, regardless of how wealthy one is.

While punitive taxes are bad, with fines, OTOH, the whole purpose of them is to punish lawbreaking behavior.

Having said all that, I think basing fines on income would create an unholy mess.  And as I said earlier, few people are deterred by fines anyway.  So why bother?

If we're really serious about curbing certain behavior, we should impose non-monetary penalties like community service.

I'll say one thing for sure -- I'd be a lot more careful not to get nailed for speeding if I knew I'd have to spend a couple of Saturdays picking up litter on the side of the road as my punishment, rather than writing a check.

Still, I only favor that for more serious violations.  It's just too difficult and expensive to implement on a grand scale.

[JYODER240]

Tom I didnt mean that the rich shouldn't pay more in taxes, but it should be like everyone pays 30% of their income (obviously there's more that goes into than that) I dont think the lower class should pay 15% while the wealthy pay 45%.

[Rupert]

Would you rather poor people pay 45% or rich people pay 15%? or both pay 30%?

[ifcar]

Tom I didnt mean that the rich shouldn't pay more in taxes, but it should be like everyone pays 30% of their income (obviously there's more that goes into than that) I dont think the lower class should pay 15% while the wealthy pay 45%.

The theory is that if you are making $500k a year, you can get much better after giving up half of that  than someone who is making $15K a year can give up even 10%.

[dazzleman]

Would you rather poor people pay 45% or rich people pay 15%? or both pay 30%?

Psilos, I think he's pretty clear that, in your example, both should pay 30%.  Of course, there are different classes of income, which complicates the issue.  Currently, investment gains are taxed at a lower rate than wages, in order to encourage investment and spur economic growth.

The issue of how steeply progressive taxes should be is a legitimate one.  And the tax structure that we adopt should be the one that encourages the maximum economic growth, and therefore the highest living standards, for the greatest number of people.

This will probably not, BTW, be a structure that appears 'fair' to everybody.  Some people never think the 'rich' (which really means those with above average income, not necessarily the wealthy) are paying their 'fair share,' but the reality is that taxing higher income people in a punitive way, while politically palatable to some people, has a strongly depressing effect on economic growth, which is harmful to middle and lower income people also, and more than offsets the supposed benefits of the 'fairness' that it seeks to impose.

None of this really is applicable to fines, though.  First off, fines are a much smaller number, and for most people occur pretty infrequently in the grand scheme of things.  And they are easily avoidable by obeying the law, though that is something most of us here find to be out of the question.  

But the key point is that fines are so small in the grand scheme of things, and levied so infrequently against the average person, that policies on fines, versus tax policy, bear little relevance to each other.

And as I said, while taxes should not be punitive, the whole purpose of fines is to punish, though they do so pretty ineffectively in my opinion.  While in theory we should punish illegal behavior, we should most definitely not punish hard work, success, and financial risk-taking that stimulates job and economic growth, as many effectively seek to do in the name of 'fairness.'

[saxonyron]

Talking about tax structure brings to mind the Laffer Curve.  Although it's a subject of debate, the underlying principal is undeniable - there is a point where lowering the tax rate will increase tax revenue.  This concept stinks like low tide to liberals who see everything as a class war and want to penalize higher income people while pandering to lower income people who ostensibly willl benefit from federal giveaways of tax dollars taken from "rich" people.  

Take it to an extreme like they teach you in engineering school.  0% tax rate brings nothing in.  100% tax rate will soon bring nothing in, because no one will  work since they don't get to keep any fruits of their labor.  The optimal point taxation for highest tax revenue is somewhere in between.  Ideally the government will bring in the money they need (how much they need and for what is an entirely different question!    ) by tuning up the rate to still encourage businesses to grow and create jobs and wealth.  That is a progressive tax system.  There's a little "turbo lag" involved there, because you must allow capitalists to ~~~gasp!~~~~ keep some of their money.  The big tax revenue will follow.  Obviously, this is just unacceptable to the average socialist.  Instead, you end up with situations like you have in Europe with regressive taxation, a stifling economy, and little job growth.  

The best summary statement I can recall was made by my French sister-in-law's Dad.  He was complaining about how ridiculously high and painful his taxes were - over 60% of his paycheck.  (This doesn't even include the massive sales and use taxes levied on every purchase he makes with what money is left in his check, of course.)  He sort of threw up his hands and said (to paraphrase him) "Well, it's a good thing we have free health care and free education!"  Delusional thinking has led this man, who is being robbed every week, into thinking that he's getting a good deal.  No wonder France is in such fine condition.      

[dazzleman]

Talking about tax structure brings to mind the Laffer Curve.  Although it's a subject of debate, the underlying principal is undeniable - there is a point where lowering the tax rate will increase tax revenue.  This concept stinks like low tide to liberals who see everything as a class war and want to penalize higher income people while pandering to lower income people who ostensibly willl benefit from federal giveaways of tax dollars taken from "rich" people.  

Take it to an extreme like they teach you in engineering school.  0% tax rate brings nothing in.  100% tax rate will soon bring nothing in, because no one will  work since they don't get to keep any fruits of their labor.  The optimal point taxation for highest tax revenue is somewhere in between.  Ideally the government will bring in the money they need (how much they need and for what is an entirely different question!    ) by tuning up the rate to still encourage businesses to grow and create jobs and wealth.  That is a progressive tax system.  There's a little "turbo lag" involved there, because you must allow capitalists to ~~~gasp!~~~~ keep some of their money.  The big tax revenue will follow.  Obviously, this is just unacceptable to the average socialist.  Instead, you end up with situations like you have in Europe with regressive taxation, a stifling economy, and little job growth.  

The best summary statement I can recall was made by my French sister-in-law's Dad.  He was complaining about how ridiculously high and painful his taxes were - over 60% of his paycheck.  (This doesn't even include the massive sales and use taxes levied on every purchase he makes with what money is left in his check, of course.)  He sort of threw up his hands and said (to paraphrase him) "Well, it's a good thing we have free health care and free education!"  Delusional thinking has led this man, who is being robbed every week, into thinking that he's getting a good deal.  No wonder France is in such fine condition.    

There's no such thing as 'free' in this world.

When people say they want or expect something for 'free' as a 'right,' what they're really saying is that they want somebody else to pay for it, in return for nothing.  That somebody else is you and me.

[thewizard16]

I think this is completely unfair. I'm no fan of anything income based, though I can at least understand the resasoning for tax brackets, I think that this income based speeding fine, especially of such a gross amount (I don't care if you make 2 billion a year, $12million is ridiculous) is absolutely unfair, and should be illegal.

[dazzleman]

I think this is completely unfair. I'm no fan of anything income based, though I can at least understand the resasoning for tax brackets, I think that this income based speeding fine, especially of such a gross amount (I don't care if you make 2 billion a year, $12million is ridiculous) is absolutely unfair, and should be illegal.

Relatively speaking, a person making $1 billion per year isn't going to be stung too hard by a $12 million fine.

But it's still a ludicrous penalty for the charge.

And it creates a built-in incentive for the police to target people with expensive cars for tickets, since that will yield a lot more revenue and, whatever they say, one way or another they will be rewarded for bringing in greater amounts of revenue.

[L. ed foote]

On a related note, today my coworker told me I was "excessively cavalier" 

Hah, that's pretty funny.  It's probably true, but it's part of the reason you're a cool guy to discuss these things with.

What led this person to say this to you?

Many stories, about me growing up, about my ex girlfriends, about (mis)adventures I've had over the years.

I have a tendency to take things in stride, as opposed to my coworker, I guess.  I tend to be flip sometimes, aloof other times, and indifferent other times.  It was during retelling of a story where I lost my ex's cat where I was told I was excessively cavalier.  

[TBR]

Right now it looks like a pretty good system to me, now if we could just have insurance work the same way. :P

But, it really isn't a fair system. As far as flat vs structured tax rates, it is definitely a complicated issue. On one hand a flat rate system is definitely more fair, on the otherhand that does put an unpractical burden on lower end families. Quite frankly, I would rather give the government 20% of my income and give another 30% to need based charities than give 50% of my income directly to the government, I think that would be the best solution. Let the better off choose for themselves who their money helps, but then government welfare programs aren't going any where.