Is it possible to reduce the gap between the rich and poor through traffic fines? Several European countries use an income-dependent fine system, with wealthy violators paying higher traffic fines than low-income traffic offenders. Finland, Sweden, and Germany, among others, have maintained such a traffic fine system for decades. Yet, an income-dependent traffic fine system is not gaining a foothold in the Netherlands. This is a missed opportunity, according to Elena Kantorowicz-Reznichenko, professor of Quantitative Empirical Legal Studies at Erasmus School of Law and an expert on income-dependent fines.
Light traffic offences such as speeding, wrong parking and driving through a red light, are dealt with through administrative law in the Netherlands. However, the more serious traffic offenses, such as significant speeding over 30 km/h (and 40 km/h on the highway) and driving under the substantial influence of alcohol, fall under criminal law. In both cases, The Netherlands uses a traditional traffic fine system in which a standardised norm violation - speed, for example - is the benchmark.
Kantorowicz-Reznichenko explains that there is an alternative to the Dutch system. This alternative fine system takes into account a traffic offender’s income. Such a fine system relates to criminal offences; that is, in this case, the more serious traffic offenses listed above. Kantorowicz-Reznichenko’s ideas on income-dependent fines, therefore, concern fines imposed for these criminal traffic offences.
What could an alternative penalty system look like?
“For instance, in Finland, the fine for a traffic violation is determined based on the severity of the violation, on the one hand, and the offender's disposable daily income, on the other hand”, Kantorowicz-Reznichenko says. Determining the severity of the violation and its reflection in the size of the fine is separate from the offender’s income. “This means that the number of days of fines is determined based on the severity of the violation and is the same for people committing the same violation. However, the amount which needs to be paid for each day is different depending on the violator’s income”, Kantorowicz-Reznichenko adds. An example is that all offenders pay fifty per cent of their daily income.
In other countries, income-dependent fines are also used for crimes such as theft, robbery and minor assault. In Germany, for instance, the income-dependent fine system is even used for sex and drug offenses.
The financial and mental impact of traffic fines
An income-based system is a form of levelling that attempts to equalise the punitive impact of fines on people. American research shows that apart from the financial implications, traffic fines can also have a great mental impact on low-income people. For example, a $175 traffic fine causes two to five times more stress for the poorest quarter of traffic offenders than for the wealthiest quarter. Big earners would easily laugh off traffic fines because of the minimal financial impact.
The advantages of an income-dependent fine system
Kantorowicz-Reznichenko, therefore, considers the Dutch traditional fine system to be unfair. In her book Day fines in Europe she examines the various fine systems and their implications. According to her, standard traffic fines are easy to administer and at first glance seem to be fair since they are uniform for all violators. However, a standard fine is, in fact, regressive. The poorer the violator is, the larger share of the violator’s income is taken to pay the traffic fine. For example, a 200 euro fine would constitute about 16% of the monthly wage of a person earning 1.200 euros per month and 2% for a person making 10.000 euros per month. “Consequently, the poorer person bears a heavier burden for the same violation than the richer person”, Kantorowicz-Reznichenko concludes.
“With the standard traffic fine the “right” to violate can simply be bought by those for whom this amount is insignificant”
Another advantage of income-dependent fines stressed by Kantorowicz-Reznichenko is their better ability to deter violations. “With the standard traffic fine, the “right” to violate can simply be bought by those for whom this amount is insignificant. Connecting the fine to the income has a better potential to deter people from violating the law irrespective of their income and wealth”, Kantorowicz-Reznichenko explains.
Yet levelling via traffic fines has little support in the Netherlands. Political parties such as the ‘SP’ and ‘ChristenUnie’ suggested the income-dependent system several years ago but experienced much resistance. According to Kantorowicz-Reznichenko, reluctance to adopt such a model of fine might lie in different reasons. “First, this system introduces more complexity than the standard fines. In principle, the income of each violator needs to be accounted for whenever a fine is imposed. Second, the information which is needed to set the proper fine might violate the right for privacy of the individual. Finally, some might be concerned about too high fines for the richest violators. For example, a Nokia director received a fine of more than 100.000 euros for speeding in Finland”, Kantorowicz-Reznichenko explains.
Overcoming the complexities
According to Kantorowicz-Reznichenko, reform depends mainly on political will and the support of the legal community. “With such will, the complexities can be overcome”, Kantorowicz-Reznichenko states. For example, the Dutch tax authority already collects the information necessary for the application of income-dependent fines. In principle, this information could be used to set the fine without additional information collection. “In Finland, the criminal code explicitly refers to the tax report as the source for the income for the fine. Privacy is, of course, a concern, but the same argument may go for the tax authorities and other Dutch public authorities that collect a lot of information about us, for example, how much money we have in the bank”, Kantorowicz-Reznichenko says.
Therefore, according to Kantorowicz-Reznichenko, it is a matter of political choice whether making the (traffic) fine system fairer and potentially more deterrent is sufficiently essential to compromise (once again) the privacy rights of individuals. “Given that already half of the EU countries are applying the income-dependent fine model, there is a lot of experience to learn from”, Kantorowicz-Reznichenko states.
“There is a lot of experience to learn from”
With respect to fines for criminal offences, income-based fines have already been considered in the Netherlands as an alternative to Article 24 of the Penal Code. This article states that offender’s financial capacity needs to be considered.
However, according to Kantorowicz-Reznichenko, without clear instructions how such information needs to be considered it is difficult to achieve uniformity between judges in the application of article 24 of the Penal code. Such lack of uniformity has been reported in a WODC (2020) report. “The lack of uniformity in accounting for financial capacity has been a concern in other countries which then adopted the income-dependent fine to overcome it”, Kantorowicz-Reznichenko says. “Lack of systematic accounting of the offender’s financial capacity misses the goal of such legal provision and leads to potential inequalities in the application of criminal law”, she adds.
Reforming Article 24 of the Criminal Code?
Last year, a judicial commission on behalf of Landelijk Overleg Vakinhoud Strafrecht (LOVS) has discussed the issue of Art. 24 of the Penal Code. They have invited Prof. Kantorowicz-Reznichenko to provide advice on the topic of income-dependent fines. The commission’s report has been submitted to the Ministry of Justice and Security. A response from the ministry is yet to be heard.
“Income-dependent fines are not flawless, but their advantages render at least a serious discussion among policymakers of the possibility and the ways to adopt them”, Kantorowicz-Reznichenko concludes.
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