Check Your Speed
Here in these United States, tax policy rests on the notion that tax rates should rise with income, so those who earn more pay a greater share of their income. In 2020, the top 1% of earners took home 22% of all income and paid 42% of all federal income tax. While a significant minority would prefer a flat tax, polls show most Americans support the current system.
But what about fines and penalties for things like parking violations, littering, and other low-level offenses? A $100 ticket can be devastating for a single New York mom struggling to feed her kids—yet the same amount is couch-cushion money for a downtown hedge funder. How fair is that?
Last month, New York City Councilman Justin Brannon introduced a bill that would apply a sliding scale to those sorts of transactions. They’re called “day fines,” and they’re set so that offenders pay a fixed percentage of each day’s income, regardless of how much that might be. Fine might look something like a quarter of a day’s pay for littering or half a day’s pay for double parking.
So far, just two of his fellow council members have signed on to the idea, and the tabloids are screaming bloody murder. (That’s what makes tabloids so much fun to read.) But in an age when every dollar counts, it’s a plausible idea that might be worth considering.
Well, they do things a little differently in Finland. What else would you expect from a country where reindeer sausage is a delicacy and wife-carrying is a thing? (Cross the Finnish line first and win your wife’s weight in beer!) In Finland, when the police pull you over, they check your license, your registration, and your tax return. They want that ticket to hurt, even if you’re loaded—so the more you make, the more you pay.
Reima Kuisla is a Finnish investor, hotelier, and racehorse owner. One day in 2015, when he was driving to the airport, the polissi clocked him doing 64 mph in a 50-mph zone. They checked his taxes and discovered that he had made over $7 million the previous year. Then they fined him the equivalent of $65,000! (The press didn’t tell us what kind of car Kuisla was driving. But we can assume it came fully equipped with the latest heads-up navigation display, active suspension, and special charcoal scrubbers to filter out any stray whiff of poverty.)
Kuisla’s supercharged fine works out to the same as $415 for someone making $50,000 per year. Painful, though not fatal. But if you think he took it in the spirit of Nordic fairness, boy are you going to be disappointed. “Ten years ago I wouldn’t have believed that I would seriously consider moving abroad,” he whined on his Facebook page. “Finland is impossible to live in for certain kinds of people who have high income and wealth.” Not surprisingly, no one listened to his tiny violin.
The trick, of course, is figuring out how much scofflaws make. Up until 1996, police relied on the honor system. Sometimes that worked, and sometimes it didn’t. In 1996, though, the Tax Administration’s technology made it possible for police to pull up tax info right on the spot.
So, at least for today, we don’t have to worry about traffic cops and parking enforcement officers snooping through our taxes. But if we did, it would just be another good reason to have a plan to pay less. So set up a time to come see us. And watch your speed on your way over—we don’t want you wasting your savings on a ticket!