Thursday, May 7, 2015

It Could Cost You $58,000 For a Speeding Ticket (in Finland) (if You're Rich)

Posted By on Thu, May 7, 2015 at 9:30 AM

Wrap your mind around this. You get caught doing 64 m.p.h. in a 50 m.p.h. zone. Your fine? $58,000. Outlandish? Yes, but not as absurd as it looks at first glance.

Fifty-eight grand, or more, is a possible fine in Finland for someone going 14 m.p.h. over the speed limit. Not driving drunk, not speeding through a school zone, not causing an accident, just speeding. The only factor making the fine that steep is the driver's income. In this case, the driver made $7 million a year. In the good ol' U.S. of A., that doesn't matter. Here, a fine for speeding is supposed to be a fine for speeding, no matter who you are. But in Finland, and in some other Scandinavian countries, they see things differently. They believe in progressive taxation far more than we do—if you make lots of money, you can afford to pay a significantly higher percentage of your income in taxes than someone who makes less money, they believe—and they also believe in the idea of progressive punishment.

Let's logic this out. If two people are sentenced to six months in prison for a similar offense, they're getting equal punishment — 182 days taken away from their lives in the outside world. If another two people are made to do 200 hours of community service, again, they're being forced to give up the same amount of their time as punishment for their crime. But if two people are fined $300 for speeding, their economic circumstances can make that fine as different as night and day. Someone earning a minimum wage has to work almost a full week to pay the fine. For someone who earns a million dollars, it's about half an hour's pay, and for the Finnish speeder in question, it's closer to 5 minutes. There's no way you can say those people have been punished equally for their offense.

Here's the rationale behind that $58,000 fine. The judge decided the offense deserved a punishment of eight days earnings — actually, half of eight days earnings, the way they calculate it. So you take a $7 million annual earnings, divide it by about 250 working days a year, then cut that in half, and you come up with $58,000. If someone else made $30,000 a year, that person would be fined about $240.

It's a logical system, far more logical than ours. If the punishment is supposed to fit the crime, then it should put as close to the same hurt on everyone as possible. If it's supposed to act as an equal deterrent—"I better not do that again!"—the punishment should matter equally to rich and poor alike. The Finns' way of calculating speeding tickets comes far closer to that ideal than our system where everyone is supposed to pay the same fine for the same offense.

Obviously, we're never going to give fifty thousand dollar fines for going 14 miles over the speed limit here, nor do I think we should. In fact, that's not the way things work out in Finland either. The $58,000 ticket was appealed, and the guy ended up paying $5,700. But if you're thinking about fairness, we should be taking the ability to pay more into consideration than we do.

And if we go from progressive punishment back to progressive taxation, the implementation changes but the concept is the same. Those who have more can afford to pay a larger portion of their income to maintain the government and the services it provides. In Finland, top earners pay more than 50 percent. Here, the rich get richer at the same time they fight tooth and claw to lower the amount they pay.

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