band annie's Weblog

Finland doesn’t mess around when it comes to income inequality. Just ask Reima Kuisla, a Finnish businessman with an annual income of $7 million.

He was recently fined 54,024 euros (about $58,000) for traveling a modest, if illegal, 64 miles per hour in a 50 m.p.h. zone. And no, the 54,024 euros did not turn out to be a typo, or a mistake of any kind.Mr. Kuisla is a millionaire, and in Finland the fines for more serious speeding infractions are calculated according to income. The thinking here is that if it stings for the little guy, it should sting for the big guy, too

Traffic fines in Finland, and to a lesser extent, in other Scandinavian countries, are assessed depending on your income, through a complex system accessible by police through a one-minute inquiry to the Finnish tax office:

The fines are calculated based on half an offender’s daily net income, with some consideration for the number of children under his or her roof and a deduction deemed to be enough to cover basic living expenses, currently 255 euros per month.Then, that figure is multiplied by the number of days of income the offender should lose, according to the severity of the offense.

Mr. Kuisla was fined for “eight days.” If he had made only $54,000 per year he would have received about a $370 fiine.

The Nordic countries have long had a strong egalitarian streak, embracing progressive taxation and high levels of social spending. Perhaps less well known is that they also practice progressive punishment, when it comes to certain fines.

As one might expect, Mr. Kuisla did not take the news well, venting on Facebook to a (for the most part) bemused and unreceptive Finnish audience:

The ticket had its desired effect. Mr. Kuisla, 61, took to Facebook last month with 12 furious posts in which he included a picture of his speeding ticket and a picture of what 54,024 euros could buy if it were not going to the state coffers — a new Mercedes. He said he was seriously considering leaving Finland altogether, a position to which he held firm when reached by phone at a bar where he was watching horse races.“The way things are done here makes no sense,” Mr. Kuisla sputtered, saying he would not be giving interviews. Before hanging up, he added: “For what and for whom does this society exist? It is hard to say.”

Actually it’s not that hard to say. Finland boasts one of the most admired and successful educational systems in the world, with no tuition fees, highly educated teachers and professors, and fully subsidized meals for students.  Progressive taxation of the wealthy makes that and many other programs for social good possible:

Finns have one of the world’s most generous systems of state-funded educational, medical and welfare services, from pregnancy to the end of life. They pay nothing for education at any level, including medical school or law school. Their medical care, which contributes to an infant mortality rate that is half of ours and a life expectancy greater than ours, costs relatively little. (Finns devote 7 percent of gross domestic product to health care; we spend 15 percent.) Finnish senior citizens are well cared for. Unemployment benefits are good and last, in one form or another, indefinitely.

This explains why Mr. Kuisla’s highly publicized indignation has largely been met with indifference by the Finnish public. While there is general agreement that the fine in this case might be excessive, there is also acceptance that fines and taxes should continue to be assessed in a progressive manner based on income.  That’s because the system works wonders for the vast majority of the Finnish people. In fact, the general reaction to Mr. Kuisla’s blustering about leaving the country has been to show him quickly to the door:

“This says a lot about the times when the stinkingly rich can’t even take their fines for crimes, but are immediately moving out of the country. Farewell, we won’t miss you,” said one post in The Helsingin Sanomat, a daily newspaper and website.

Of course, one can sympathize with Mr. Kuisla to some degree. He’s hardly the first person to have been caught speeding, rich or poor. The fact is, however, that he should have known better. He was previously hit for an $83,000 fine for doing 76 in a 50 MPH zone.  Courts do take into account mitigating factors and Mr. Kuisla had that fine reduced to about $7000 U.S., since his “income” that year was based on a one-time stock sale.  A ticket issued in 2002 assessed a $103,600 fine against a heavy-footed motorcyclist who blew through Helsinki in too much of a hurry.  That ticket was based on an income of $12 million.Police note that very, very few tickets of this magnitude are issued, although they acknowledge they do not keep track of them.