From Each According to His Ability: "Progressive Pricing" Coming Soon to a Nation Near You
Last week the Swiss newspaper Blick broke the story of a guy who was caught driving above the speed limit through the town of Mörschwil and given a speeding ticket for $290,000. No, that's not a typo -- two hundred and ninety thousand dollars.
What could possibly justify such a large fine? One simple reason: The guy was rich. And under a new scheme of "progressive pricing" that's becoming more and more common across Europe, rich people must pay higher fees for things because they can afford it -- and because, well, they're rich, and therefore deserve extra punishment.
Blick even featured a mugshot-like photo of the offender with the shocking caption, "Traffic thug Roland S. has five luxury cars in his garage."
Horrors! Five fancy cars?!?! What an outrage. On that count alone we should condemn him. (A rough English translation of the Blick article can be read here.)
But wait -- that's not all! The British tabloid Express pointed out that the judges deciding on the size of his fine heard testimony that Roland S. was Facebook "friends" with Formula 1 stars Michael Schumacher and Felipe Massa. Unforgivable!
As to how the judges arrived at the reasonable sum of $290,000, the Express notes,
Under Swiss law he was fined for the offence, then had the sum multiplied by 130 to account for his fortune.
The penalty is the highest speeding fine handed out in Switzerland. He was ordered to pay half of it in cash immediately with two years for the rest.
He was stopped last month driving at 85mph through the town of Morschwil, where the speed limit is 50mph.
The few American papers which covered this story safely classified it as "Today's Weird News" or "Oddly Enough!", an anecdote presented solely for our amusement, nothing to think about too deeply.
Yet The Fine of Roland is no mere bagatelle. It may be a vision of our future. And you should care very deeply indeed.
More Than Just a Funny Story
On Sunday, AP published an article pointing out the significance of Roland's fine: Far from being an isolated incident, it's part of a growing trend in Europe to scale fines and fees to match the payer's income level:
European countries are increasingly pegging speeding fines to income as a way to punish wealthy scofflaws who would otherwise ignore tickets.
Advocates say a $290,000 (euro203,180.83) speeding ticket slapped on a millionaire Ferrari driver in Switzerland was a fair and well-deserved example of the trend.
Germany, France, Austria and the Nordic countries also issue punishments based on a person's wealth. In Germany the maximum fine can be as much as $16 million compared to only $1 million in Switzerland. Only Finland regularly hands out similarly hefty fine to speeding drivers, with the current record believed to be a euro170,000 (then about $190,000) ticket in 2004.
The Swiss court appeared to set a world record when it levied the fine in November on a man identified in the Swiss media only as "Roland S." Judges in the eastern canton of St. Gallen described him as a "traffic thug" in their verdict, which only recently came to light.
"As far as we're concerned this is very good," [said] Sabine Jurisch, a road safety campaigner with the Swiss group Road Cross.
Turns out that such astronomical speeding tickets are commonplace in Europe now. Finland bases its fees on the payer's income, including one infamous case in which the son of a wealthy sausage-making family had to pay 170,000 Euros for driving 50mph in a 25mph zone. The Norwegians take it even one step further, sentencing wealthy people to intentionally humiliating hard labor as well, such as the drunk driver who not only had to pay a $85,000 fine but also chop wood for 30 days.
The idea is catching on. Pundits in Wales want the same variable pricing scheme to be enacted in their country. And yes -- inevitably -- some writers have already suggested bringing similar laws to the U.S., making all fines and fees be not a fixed amount but rather a percentage of your annual income. The author of the linked essay, discussing the inherent unfairness of a $250 speeding fine, gives a good clear presentation of the basic argument for the progressive position:
To someone who makes minimum wage, $250 is a big deal. A person working for minimum wage makes about $10,000 per year. $250 is more than a week's wages. $250 is 2.5% of your annual income -- it is a serious amount of money. But to someone who makes $200,000 a year, $250 is meaningless. It is only 0.125% of your annual salary. The deterrent effect is minimal -- it is 1/20th the impact of a person making minimum wage.
Whether a construction worker is killed by a rich guy speeding in his Porsche, or killed by a minimum-wage guy in his second-hand Ford Escort, the result is the same -- either way it is a tragedy for the family of the construction worker. So the goal of deterring speeding is just as important for rich and poor drivers. But how do you make the speeding fine just as "painful" for a rich person, so that it has the same deterrent effect?
The obvious way is to scale the fine based on income. So the sign does not say, "$250 fine for speeding". Instead it says, "2.5%AI fine for speeding," where 2.5%AI means "2.5 percent of annual income." If you make $200,000 per year, the fine would work out to $5,000. The financial impact of the speeding ticket would be just as strong for a rich person as it is for a poor person. That way, the deterrent effect of the fine would be the same for everyone.
How does that idea strike you?