Defending (One Version of) Class Warfare

I normally despise people who promote class warfare.

Assuming someone has earned money honestly (and not via cronyism, bailouts, subsidies, protectionism, or industrial policy), I don’t care if that person earns millions of dollars or billions of dollars.

Indeed, I applaud their success since the rest of us actually capture most of the value created by successful entrepreneurs.

This explains why I have so much disdain when politicians like Biden and Harris promote hate-and-envy tax policy. And why I am equally critical of the class-warfare agenda of left-wing bureaucracies such as the OECD and IMF.

I oppose class warfare because it is very bad for prosperity. And it is disgustingly immoral.

But I have one exception. Though it deals with punishment rather than taxation.

Here are some excerpts from a column in the Washington Post. Authored by Lee Hockstader, it defends the way some European nations hit rich people with very high penalties (called “day fines”) when they speed.

…income-based penalties for speeding and other relatively minor criminal infractions seem a straightforward progressive idea, in line with other redistributive policies that prevail across much of Europe. What began as an egalitarian-inspired policy in Scandinavia now applies in more than half the European Union’s 27 member countries, plus Norway and some others outside the E.U. …Last year, a rich businessman in Finland who exceeded the approximately 30 mph speed limit by 20 mph was assessed a fine of about $130,000. …Finland’s income-based system, Europe’s first, was enacted in 1921. Over the years, violators who made headlines there by being hit with punitive fines — which also apply to shoplifting and securities-exchange infractions, among others — include a National Hockey League player and a Nokia executive. …The European countries that have adopted day fines apply them to a variety of violations — theft, fraud, drug crimes, even minor sex offenses. In the case of traffic enforcement, they often kick in for major speeding violations.

Hockstader prefers the European approach over the American approach.

…day fines have one big advantage over the one-size-fits-all variety, which is widely enshrined in the United States. Fixed fines are regressive, disproportionately hurting the poor. That argument should register in the United States, where legal sanctions are often assessed without regard to social justice — or where they exact a disproportionately heavy toll on the poor and minorities, as a 2015 Justice Department report on Ferguson, Mo., showed.

This will sound strange since I frequently argue that we should not copy Europe (including a column just two days ago), but I’m sympathetic to Hockstader’s argument.

But that’s because I understand that both taxes and fines are a deterrent. That being said, I don’t want to deter good things (earning money), but I do want to deter bad things (committing crimes).

And a $100 fine may have a big deterrent effect on a poor person but it will be utterly irrelevant to a rich person.

Before anyone accuses me of being a leftist, allow me to stress that my main motive is protecting low-income people, not hurting rich people. I find it reprehensible that many state and local governments aggressively figure out ways to take money from the less fortunate.

I’ll close with a very important caveat. I don’t want to treat rich people as badly as poor people. I want everyone treated equally and humanely.

Here are the three principles that I outlined in 2020 when addressing the same issue.

• Have fewer nuisance laws that lead to fines, fees, and charges.
• Have income-based fines for things we want to deter, but at a modest level for rich and poor alike.
• Perhaps most important, control government spending so politicians have less incentive to grab more money from people.

The bottom line is that I don’t want government to screw over poor people, just as I don’t want government to screw over middle-class people or rich people. Or to screw over me.

P.S. I also addressed this issue in 2010 and 2015.