Most of Scandinavia determines fines based on income. Could such a system work in the U.S.?
Reima Kuisla, a Finnish businessman, was recently caught going 65 miles per hour in a 50 zone in his home country—an offense that would typically come with a fine of a couple hundred dollars, at most, in the U.S. But after Finnish police pulled Kuisla over, they pinged a federal taxpayer database to determine his income, consulted their handbook, and arrived at the amount that he was required to pay: €54,000.
The fine was so extreme because in Finland, some traffic fines, as well as fines for shoplifting and violating securities-exchange laws, are assessed based on earnings—and Kuisla’s declared income was €6.5 million per year. Exorbitant fines like this are infrequent, but not unheard of: In 2002, a Nokia executive was fined the equivalent of $103,000 for going 45 in a 30 zone on his motorcycle, and the NHL player Teemu Selanne incurred a $39,000 fine two years earlier.
“This is no constitutionally governed state,” one Finn who was fined nearly $50,000 moaned to The Wall Street Journal, “This is a land of rhinos!” Outrage among the rich—especially nonsensical, safari-invoking outrage—might be a sign that something fair is at work.
Finland’s system for calculating fines is relatively simple: It starts with an estimate of the amount of spending money a Finn has for one day, and then divides that by two—the resulting number is considered a reasonable amount of spending money to deprive the offender of. Then, based on the severity of the crime, the system has rules for how many days the offender must go without that money. Going about 15 mph over the speed limit gets you a multiplier of 12 days, and going 25 mph over carries a 22-day multiplier.
Most reckless drivers pay between €30 and €50 per day, for a total of about €400 or €500. Finland’s maximum multiplier is 120 days, but there’s no ceiling on the fines themselves—the fine is taken as a constant proportion of income whether you make €80,000 a year or €800,000.
Sweden, Denmark, Germany, Austria, France, and Switzerland also have some sliding-scale fines, or “day-fines,” in place, but in America, flat-rate fines are the norm. Since the late 80s, when day-fines were first seriously tested in the U.S., they have remained unusual and even exotic.
But to advocate for the American adoption of day-fines isn’t to engage in the standard grass-is-greener worship of Scandinavia that’s in style right now. It’s logical. Yes, day-fines might dissuade the rich from breaking the law; after all, wealthier people have been shown to drive more recklessly than those who make less money, and Steve Jobs was known to park in handicapped spots and drive around without license plates.
But more importantly, day-fines could introduce some fairness to a legal system that many have convincingly shown to be biased against the poor. Last week, the Department of Justice released a comprehensive report on how fines have been doled out in Ferguson, Missouri. “Ferguson’s law enforcement practices are shaped by the City’s focus on revenue rather than by public safety needs,” it concluded.
“There’s a renewed interest in this because of the outrageous kind of fining and gouging that has become well-known out of Ferguson,” says Judith Greene, who founded Justice Strategies, a nonprofit research organization. “But of course that kind of stuff goes on everywhere.” Greene says that day-fines won’t curb the troubling practice of aggressive, means-to-an-end fining, but it would be effective to introduce them anyway. “Then the criminal fines should come into the picture as they were originally intended, which is a criminal sanction—a penalty for crime—and then scaled appropriately,” she says.
Greene has seen America’s experience with day-fines firsthand. Nearly 30 years ago, she helped launch a pilot program in Staten Island. The first day-fine ever in the U.S. was given in 1988, and about 70 percent of Staten Island’s fines in the following year were day-fines. A similar program was started in Milwaukee, and Greene went on to work with a few other cities in implementing the day-fine idea. All of these initiatives, she says, were effective in making the justice system fairer for poor people.
So why did it fail to catch on? “The fine as a sanction back then was not seen as tough enough, the focus back then being ‘lock ‘em up,’” Greene says. “There wasn’t a lot of room for an intermediate sanction,” she says. But now that concerns about over-incarceration are much more salient, things might be different. “We have a new climate, in terms of public attitudes about criminal justice, about sentencing,” she says. “Why not now?”
Finland was the first country to introduce day-fines, having established them in 1921, but the roots of the idea run deeper. Fines were first set up as a punishment in Europe in the 1100s, and well into the Middle Ages remained a second-best alternative to simply punishing offenders by seeking personal vengeance. Montesquieu was among the first to recognize the importance of implementing them on a sliding scale. “Cannot pecuniary penalties be proportionate to fortunes?” he wondered in 1748’s The Spirit of the Laws.
The Finnish public is with Montesquieu. Four out of five Finns said that they supported day-fines over flat-rate fines in a survey from more than a decade ago, the last time the day-fine system underwent reform. (Before 1999, it was up to the offender to tell the truth to the police about his or her own income. When the police started consulting a database, day-fine revenues increased 30 percent.)
Tapio Lappi-Seppälä, who is the director of the University of Helsinki’s Institute of Criminology and Legal Policy, says that an overwhelming majority of Finns still support them. “It is a matter of social justice and equal impact of punishment,” he says.
Citizens in other countries aren’t always so supportive, though. In 1991, the governments of England and Wales tried out day-fines, only to abandon them after criticism from the media. “[This failure] can be attributed mainly to the U.K. government’s inability to defend a sound system against ill-founded public pressure and misplaced criticism,” Lappi-Seppälä wrote in the Encyclopedia of Criminology and Criminal Justice.
To be sure, not all of the criticism of day-fines is misplaced. Casey Mulligan, a professor of economics at the University of Chicago, has valid concerns about them. “An income-based system might appear to ‘help the poor,’ but that’s forgetting the victims of those crimes,” he says. He notes that income imbalances between neighborhoods could create disparities in the incidence of reckless driving. “Do we want more speeding past schools in poor neighborhoods than in rich neighborhoods?” he asks. Day-fines might make more sense in a place like Finland, where income inequality isn’t as pressing of a problem (by one measurement, at least).
Mulligan also points out that because some penalties involve time in custody, in court, or in jail, the system does, to an extent, mete out justice equally. “The value of the time component of a penalty is proportional to the penalized person’s value of time,” he says. In terms of earnings potential, an hour of a CEO’s time is worth a lot more than an hour of a janitor’s.
But at least when it comes to discouraging the wealthy from breaking the law, day-fines could be effective, says Marc Bellemare, a professor of applied economics at the University of Minnesota. “When considering a proportion of their income…people are at least constantly risk-averse. This means that the worst that would happen is that the deterrent effect of fines would be the same across wealth or income levels,” he says.
He doesn’t think the American system should be revamped overnight, but thinks that day-fines could hold promise. “We should start small—say, only speeding tickets—and see what happens,” he says. Now that America is no longer of the “lock ‘em up” mentality, day-fines should get another shot.
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