If traffic tickets cost you fractions of a penny would you drive more recklessly? Thats the question Finland has been addressing over the past few years. The surprising (or not surprising) answer is yes, which is why Finish traffic fines are assessed on an income based sliding scale. Think about it. If your net income is a million dollars and you get a $1000 ticket, thats only one tenth of one percent of your income, making it more likely for high net worth individuals to disobey traffic laws. Whereas someone who gets that same $1,000 ticket and nets $50,000 (two percent of that persons income), has a greater incentive to obey traffic laws. It also creates a disparity in incentives and highlights what most economists have long known - the wealthy live by their own set of rules. However, Finlands sliding scale for fines equalizes the system and brings the wealthy back into everyone elses world. Finland uses an individuals income to determine the cost of its fines. So if you get fined for drinking and driving as an example, the fine isnt $1,000, but 1% of net income (just an arbitrary percent for purposes of this story). If you earn a hundred thousand a year youre fined $1,000, and if you earned a million dollars a year youre fined $10,000. The assessment of these fines has been based on an honor system, that is violators tell the officer writing their ticket their income last year. Of course this leads to lying which many Fins consider the national sport. In order to curb this lying, police officers no longer ask offenders for their income and instead access their tax records. Naturally this has Finlands wealthiest up in arms about the privacy of their records and fairness of this system. Apparently however many politicians in Finland agree with this system. Leena Harkimo, a Conservative Party member of the Finnish Parliament and wife of a wealthy sports-team owner, tried to introduce a bill last year that would have capped most speeding tickets at a mere $7,825. But only 29 of the 200 members of parliament supported the legislation. Some people think its the only way to get the wealthy people to drive slowly or respect the law, she says. If theyre speeding often, lets make a system where they lose their drivers license easily. Finland also has a progressive tax system which begs the question, does Finalnds success in both arenas - fining and taxation - prove that other countries, like the US for example, should follow suit?
Posted on: Fri, 06 Jun 2014 17:13:32 +0000
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