Government Levied Fines Should Be Earmarked to Foreign Aid

-- By AlexAsen - 23 Feb 2010

Intro

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." Eighth Amendment, U.S. Constitution.

The Eighth Amendment contains a clearer prohibition on excessive fines, including civil and criminal forfeitures, than it does on excessive prison. Prison is expensive and this expense acts as a natural check on a cash-poor government. The founders understood fines, on the other hand, or a way to generate revenue -- the lifeblood of government -- and thus an unchecked government would be tempted to abuse its power to fine. Today, this fear of abuse has materialized despite the Eight Amendment. Eliminating fines altogether would eliminate the perverse incentives they create, but we would also lose fines' positive attributes. There is a better solution: earmark all fines to foreign aid.

The scale of fines in America

In 2008, the Justice Department collected about $3 billion dollars in forfeited assets, a 40 percent jump from 2001. About half of this money is funneled from local law enforcement back and forth to the Feds to wash is of restrictions some states have put on how forfeiture money can be spent.

New York City, in 2008, collected $628 million in parking tickets alone.

Some drug task force budgets are independent of any town, county or state and rely completely on forfeitures. In Montgomery, Texas, the district attorney used forfeited money to buy an office margarita making machine. In civil forfeiture cases in parts of Indiana, counties are represented by private attorneys working on contingency and keeping a third of the verdicts they win. These facts come from here, the article is worth the read.

The positive attributes of fines

Fines are a constructive way for criminals to repay society. They are easy to administer and allow for punishment of minor offenses. Prison, the main alternative, is socially destructive. It deprives prisoners their freedom, families their comfort, and society their productive labor. It is also expensive.

The negative attributes of fines

Government craves money and citizens are loath to pay taxes. Fines help correct this imbalance, but in the process create a perverse incentive for government to make things illegal (or take money without evidence of a crime). Once government establishes fines as a revenue source, it is incentivized to stop critically thinking about whether the policy is socially beneficial. Citizens, in turn, loose respect for law enforcement and the sanctity of law.

The most glaring reflection of profit driven law is drug policy, but I am more personally affected by highway safety policy and fire hydrant policy.

Earmark all fines to foreign aid

Earmarking fines to foreign aid separates the body that levied the fine from any direct benefit. Accordingly, government could consider the usefulness of fines unbiased from its desire for cash. Foreign aid is underfunded because while Americans want to give more than we do, aid does not find its way into Congressional budgets in close to the amount promised.

Corporate Fines

Corporate activity is often policed with fines, but many corporations consider fines simply "the cost of doing business." Without the perverse incentive of personal and insituional gain, the government would have greater credibility assessing fines large enough to be deterrents. Of course, the perception that corporate fines are a tool to finance government coffers is low on the list of reasons why we do not have effective corporate oversight, so this possible benefit of my plan may not be sizable.

Replace lost revenue with fees

The UAE raised millions of dollars by auctioning off vanity license plates. In a somewhat different vain, the government could sell license to speed or double park or even to use illegal drugs. Selling license for such activities would stop making criminals (and violators) out of average citizens who engage in the behavior anyway. Additionally, there could be an educational component of obtaining a license. (e.g. If you want to go 80mph instead of 65mph, sit in this simulator for an hour and see how long it takes a car to stop when the road is wet.)

In America, we shy away from auctioning away rights because we do not like the idea of giving an advantage to the wealthy. Fines, however, already do this. The speeding ticket that is a week's wage for many Americans is an hour's wage for many CLS graduates -- leading to quite different deterrent effects for different classes. Licensing the led-footed wealthy to drive a little faster will not change their driving behavior, but it will change the transparency of the system.

To maximize fairness, fees should be graduated. Other countries already do this. The base price for a license to do a given activity should be the social cost. In addition to the base price, there should be a premium based on what the buyer is willing to pay. Graduation based on wealth not income is more fair, but more difficult to calculate.

Conclusion

Logistically and politically this will be an impossible change to implement as suggested. However, the core ideas, (1) government should levy fines, (2) when fines are used to supplement budgets abuse happens, and (3) there are better, more transparent way to raise revenue, are implantable in small steps at all levels of government. The first steps are to think critically and creatively.