In the sixth century, the Scythian philosopher Anacharsis said that Roman laws were "like spiders’ webs, and would catch the weak and poor, but easily be broken by the mighty and rich" [1]. Pierre-Joseph Proudhon, a 19th century political philosopher expanded on this sentiment, saying "Laws: We know what they are, and what they are worth! They are spider webs for the rich and mighty, steel chains for the poor and weak, fishing nets in the hands of government" [2]. While I am in no way a libertarian in the modern right-wing sense, the justice system in the US is incredibly unfair. I believe laws to be necessary in a capitalist system- a central government must be used to limit the injustices committed mostly in the name of wealth. This is not what laws in this country are intended to do.
I want to specifically look at a few instances where laws have failed to promote equality. First, in this piece I will examine the fundamental injustice of flat fines. I'll then write two more articles, examining the issues of laws aimed at the lower class, and the difference in legal representation based on wealth.
I touched on the issue of fines in my last post on the marijuana legalization movement. Fines are primarily imposed on either individuals or corporations/businesses, and there are major problems with each kind. I'm using fine to refer to any monetary legal punishment or restitution. Fines as punishment are generally intended to discourage that act, fines as restitution are generally intended to fix the damages caused by the act. I'll assume those intentions going forward.
The vast majority of fines in the US are flat-rate, that is they are independent on income, and solely based on the offense. The only exception to this I could find was the Affordable Care Act uninsured fine, which partially scales with income [3]. Flat rate fines hit the lower class much harder than the wealthy, as it is a more sizable chunk of their income.
For poor people, even a speeding ticket can present serious financial challenges. The lower class spends a far higher percentage of income on necessities, and thus does not have a large budget to spare for fines [4]. This creates an injustice- since wealthy individuals barely suffer from the penalties, by applying a flat rate fine the government is punishing the poor more harshly. Since the law is supposed to be blind, and treat everyone the same, a harsher punishment should not occur for the same offense. Thus, fines make being poor punishable. Sometimes these unjust financial penalties can lead to jail time as well, making being poor an offense punishable by prison [5]. Some countries have adopted a more progressive method. In Finland tickets are based on income level minus necessary expenses and dependents [6].
Corporate violations of laws are often a calculated decision to maximize profits. If m = money saved through the violation, c = chance of getting caught, and f = cost of the fine, as long as m > cf the corporation is better off violating the law. This is often the case, due to small fines, low chances of getting caught, and massive corporate profits.
Regulatory agencies often don't even have the ability to impose strong enough penalties.Take, for example, OSHA. OSHA regulates workplace conditions, and imposes fines for dangerous conditions for employees. This year OSHA's fining capabilities increased 78 percent, with the highest penalty for a serious infraction jumping from $7,000 a day to $12,471 [7]. That doesn't even register in many corporate budgets- profits from the top 10 corporations totaled around 210 billion in 2014 [8]. And corporations aren't well deterred from repeat infractions- violations determined to be willful or repeated still only have a maximum fine of $124,709 [7].
These fines become even more ineffective when you look at corporate strategies for dealing with them. While some corporations will pay, others have filed for bankruptcy to make it impossible for regulatory agencies to collect [9], and some have just neglected to pay. Certain coal companies have millions in unpaid fines, some reaching back 20 years [10]. These companies continue to operate with no additional penalties, so the fines have become in essence non-existent for them.
Corporations often have to pay a combination of a penalizing fine and a restitutive fine. This distinction is important, due to the tax code. Corporations are not allowed to count penalizing fines as a tax write-off, but they can count restitutive fines. In a study of the ten largest settlements between 2012 and 2015, the corporations payed just under 80 billion in fines, but they could count 48 billion of that as tax write-offs. This resulted in 17 billion dollars less in payed taxes [11]. This is actually less than the average- overall between 2012 and 2014, cases signed off by the DOJ had just 18.4 percent non-deductible fines [12].
There are countless other methods used by corporations to avoid or negate the impact of fines, one could easily write countless books on the topic. This issue, combined with the inequity of flat rate fines, demonstrates the fundamental problems with fines in our system. At the beginning I pointed out that the general intent of penalizing fines is to deter offenders. This is obviously ineffective in the corporate world, with penalties seen as the cost of doing business. And with flat-rate individual fines the only section of society which has a serious motivation to avoid fines is the lower class. While the rich avoid fines they can afford, the poor are imprisoned for fines they can't.
[1]: Words of Justice- Harvard Law Library
[2]: WikiQuote- from "No Gods, No Masters: An Anthology of Anarchism" (1980) Daniel Guérin, translated by Paul Sharkey (1998), p. 90
[3]: ObamaCare Mandate: Exemption and Tax Penalty (obamacarefacts.com)
[4]: How The Poor, The Middle Class And The Rich Spend Their Money (NPR)
[5]: Jail Time For Unpaid Court Fines And Fees Can Create Cycle Of Poverty (NPR)
[6]: Speeding in Finland Can Cost a Fortune, if You Already Have One (NY Times)
[7]: OSHA Penalty Adjustments To Take Effect After August 1, 2016 (osha.gov)
[8]: The 10 most profitable companies of the Fortune 500 (fortune.com)
[9]: Even after workplace deaths, companies avoid OSHA penalties (Center for Public Integrity)
[10]: Coal Mines Keep Operating Despite Injuries, Violations And Millions In Fines (NPR)
[11]: How $80 Billion in Corporate Fines Can Become $48 Billion in Tax Breaks (PBS)
[12]: Settling for a Lack of Accountability? (U.S. PIRG)
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