NCPA - National Center for Policy Analysis

Finland's Progressive Fines

January 2, 2001

Like most other countries, Finland has progressive tax rates. But unlike other countries, Finland has extended the concept of progressivity -- under which the wealthy pay more than those of modest income -- to traffic fines. Indeed, the wealthy are also hit harder when convicted of such diverse crimes as shoplifting or securities-law violations.

But it is the traffic fines that are particularly irksome to well-off Finns.

  • In one recent case police issued a $71,400 speeding ticket to a motorist who was clocked at 43 miles an hour in a 25 miles-an-hour zone.
  • With traffic fines based on a combination of the severity of the offense and the driver's income, police until recently had been satisfied to accept whatever violators claimed as their current monthly gross income -- until they found that the figures were routinely being understated.
  • But then motorists complained that fines should be based on take-home pay -- which is considerably less, given Finland's high tax rates, than gross income.
  • So late in 1999 the government began basing fines on net income -- and police have begun using cellular phones to access official tax records to verify incomes.

While middle-income Finns seem to find the system fair, some of their wealthier countrymen wonder if they should even risk hefty fines by getting behind the wheel of a car in the first place.

Source: Steve Stecklow, "Helsinki on Wheels: Fast Finns Find Fines Fit Their Finances," Wall Street Journal, January 2, 2001.

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