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?
Progressive -- in Both Senses of the Word
The term "progressive" has been adopted by the modern left as the understudy for the increasingly besmirched term "liberal," and so we now think of it as a strictly political concept. But "progressive" is also a mathematical and economic notion, referring to rates or ratios which magnify with every step. Our tax system, for example, is called a progressive tax, because the more money you make, the higher the rate of taxation on your income. In Europe, it should be noted, the progressivity of the tax rate is often much higher than it is in the U.S. -- meaning that the tax rates for high earners can be above 50% in some countries.
Progressives love progressive rates -- because they are a mild and socially acceptable way to introduce Marxist concepts into the economic system. Instead of simply confiscating all the assets of the wealthy en masse and consigning them to re-education in the fields, we tap off their assets little by little, and redistribute it painlessly.
We've gotten so used to the concept of progressive tax rates that we don't really think twice about it anymore. We've become acclimated to the notion that wealthy people should be penalized for their wealth to a greater degree than everyone else. But progressive pricing schemes would be basically the same concept, and are just as rational (or as irrational, depending on your point of view).
I believe the AP article linked above is the first salvo in opening a new front in the War on the Rich: progressive pricing. They've broached the idea of progressive fines and introduced it into the American dialogue. Are we ready?
From Each According to His Ability
If all this seems a bit cockeyed from an American vantage point, remember that Europeans have an undying affection for Marx and his slogan, "From each according to his ability, to each according to his needs." While conservative American pundits often focus on the second half of that phrase -- "to each according to his needs" -- when criticizing the Welfare State and incessant government handouts, little attention has been paid in the U.S. to the first part of the slogan, because up until now it hasn't been implemented fully.
Sweetness & Light, one of the few blogs to cover the speeding-ticket story, was also the first to point out the inherent Marxism in the idea of progressive fee structures.
It's kind of hard not to hate Eurotrash who hurtle down Swiss country roads in Ferraris, knocking milkmaids into the mud. They're easy villains, scapegoats used to justify the introduction of an entirely new economic structure.
Just as Bush Sr. used murderer and rapist Willie Horton as a scapegoat to criticize the revolving-door prison policies and to push for harsher sentencing laws, the Left uses smirking rich European joyriders who speed without compunction as scapegoats to criticize standardized fees and instead push for progressive pricing.
Caution: Slippery Slope Ahead
I can see where this is leading.
The graduated fine laws are the leading edge of a wedge to institute variable pricing on everything. After all, it's only "fair," right?
The same argument can be applied to every single transaction, price, expense, fine or fee: A rich man can afford it more than a poor man. So, "to make things fair," we should charge the rich man more.
The price of a $3 hamburger is a burden on a poor family, but it's nothing to a rich man; therefore he should pay $300 for the same hamburger, so he can feel a similar financial burden.
Ten dollars to see a movie is outrageous for someone just trying to scrape by; but a wealthy family can shell out $40 for movie tickets AND buy popcorn for everyone, and still not even notice the expense. Thus, it is rational to charge a wealthy family $100 per person to see a movie.
Underlying this whole drive toward "fairness" is what I consider a rather twisted worldview. The whole reason why anyone bothers to become rich in the first place is so that minor expenses don't remain burdensome. If you're broke and shivering and unable to pay your heating bill, your immediate response is usually, "I need to get a job!" But what if, having gotten that job and made more money, your heating bill is raised proportionally, to account for the fact that you can now "afford" to pay more. If this happens with every expense -- and it already does happen to a certain degree with taxes -- then what's the point of making more money in the first place? You'll always be at the same level of brokeness, since however much you earn, your expenditures will rise and fall in conjunction with your earnings. This, of course, is the recipe for individual inaction, which, multiplied a millionfold, becomes societywide inaction, which leads to the kind of cadaverous economies seen in communist countries.
This is the complementary flipside of the overly generous Welfare State, in which the poor have little motivation to work because they can live just as comfortably on government benefits as they could if they earned a low-end salary. With progressive pricing, the wealthy also have no motivation to work or earn, since their expenses will rise in proportion to their wealth. Why work? It won't gain you anything.
Go Slow: Class-Warfare Xing
Luckily, the idea of progressive fines and prices has not yet caught on in the U.S. -- and might in fact be patently unconstitutional, as noted in this old blog post about Finland's progressive fine structure:
Such a thing is, hopefully, unconstitutional in the United States. In the US, we're supposed to be equal under the law. Imagine the abuse a law like that could cause. Cities looking to increase revenue simply park officers in the wealthier parts of town. Wealthy people, effectively, would have less freedom than non-wealthy people since as a practical matter, most people speed from time to time but the wealthy would disproportionately have their speed limits enforced.
I understand the argument for such a law -- to the rich guy, a traffic fine is meaningless. A $100 fine is more of an annoyance to the millionaire due to having been stopped than the actual cost (and the increase in insurance is a bigger deal anyway). But all citizens are supposed to be equal in the eyes of the law. The rich pay far more in taxes but still have to drive on the same roads.
But where does it all end? If it's unfair that the rich can easily pay their speeding tickets, then it's also unfair that they can easily pay for their health insurance, their Frappuccinos, their underpants and their bongo drums. Those damn millionaires! They can afford stuff!
One can only hope that the United States Constitution is that last gate preventing us from careening down the slippery slope toward a "progressive" utopia of Marx-inspired economic class punishments.