Friday, October 9, 2009

Punishing the Rich and Poor, Equally

FROM THE ARCHIVES (Daily Nebraskan columns)

Punishing the Rich and Poor, Equally

Jeremy Patrick

Daily Nebraskan

December 01, 2000

"It is a wise man who said that there is no greater inequality than the equal treatment of unequals."
---Justice Felix Frankfurter, Dennis v. United States

Americans have an interesting attitude towards wealth and equality. In many cases, they consider a tax or fine "equal" if, on its face, it applies to everyone equally, such as an across-the-board 5-percent sales tax.
Because the costs of basic necessities (such as food, shelter and clothing) do not increase as one's income increases, flat taxes like this clearly and disproportionately burden the poor. Most Americans simply don't care. In other cases, such as our progressive income tax, we've come to realize that taxes are equal on their face are unequal in application.
Finland has carried this concept of proportionality to its next logical step. Last week, Jaakko Rytsola, a Finnish dot-com millionaire, was fined the equivalent of $110,000 for going 43 mph in a 25-mph zone. Just a month ago, he was fined $44,100 for switching lanes dangerously. The fines set a new record in Finland, where traffic fines are assessed according to the size of the drivers' income and how fast they were going; there's also no limit on how high the fines can go.
This idea seems radical at first, but it's perfectly consistent with the point of imposing traffic fines. If we really believe traffic fines are necessary to deter dangerous driving, then we should apply the fines in a manner that will deter everyone equally. A $200 fine for speeding may deter a poor college student, but it won't have any effect on a billionaire like Bill Gates. Because each poses the same potential threat, why not punish each one equally?
Even more important than the inconsistent deterrence effects is the fact that flat fines can literally force the poor out of their apartments or homes; the same $200 fine that is an inconvenience for most of us, is life-threatening to someone who only makes $800 a month working full-time at a minimum-wage job.
It's not as if proportional fines are unheard of in the United States. For serious criminal offenses, the Federal Sentencing Reform Act instructs judges to take account of "the defendant's income, earning capacity, and financial resources" in imposing fines. Judges do the same thing when determining bail; they know that imposing the same amount on every defendant would simply punish the poor and fail miserably in preventing a wealthy person from fleeing.
Any practical difficulties with implementing proportional traffic fines have apparently already been solved by the Finns. In a country like the United States, the real difficulty is that the people making the decision have to put themselves in a worse position than they're currently in. Because legislators and their most powerful constituents are disproportionately drawn from the upper-middle and wealthy classes, they will suffer the burden of increased fines.
As John Rawls would say, a just decision could be reached only by placing ourselves behind a "veil of ignorance," where it is equally possible that we are rich, poor, or somewhere in the middle. It remains doubtful whether abstract notions of fairness and equality are sufficient to overcome sheer self-interest.
For what it's worth, Jaakko Rytsola took his record-setting fine with aplomb.
"The drag was nice and wide, and I felt good. It's great to drive when there's no one around," he said.
Presumably, he means that it's great to drive when there's no one, including police officers, around.

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