Recent news has focused attention on a Virginia law, effective July 1, that dramatically raises fines for reckless driving, including a speeding violation at more than 15 miles per hour above the speed limit. The legislative history and statutory language makes clear that the fines are a revenue-raising measure, and they therefore raise the interesting question of whether we need to separate taxes from penaltiies, or even deterrence. (I will ignore here the interesting point that the legislation was introduced by a legislator whose law firm specializes in traffic law and will therefore see much more business in defending drivers who have more reason to dispute citations.) As if to confirm the revenue-raising goal, the fines are earmarked for transportation projects, and are to be applied only to Virginia residents on Virginia roads. At least four other states have "driver responsibility laws" that apply to out-of-staters as well as residents. I don't think this last provision was necessary for constitutionality, but let us just accept the resident/nonresident distinction as aiming to avoid claims of discriminatory enforcement against out of state residents. I return to the limitation to Virginia residents below.
More than ten thousand Virginians have, apparently, already signed a petition against the new law, which produces fines of $750 (driving without a license) and $1,050 (more than 20 mph avove the posted limit) and a number of other such fines for passing a stopped school bus, for accumulating "points" and so forth. One puzzle is why "people" object and another is why we are sometimes so accepting of revenue-raising penalties and sometimes not.
One obvious objection is that the fine/tax is not progressive. But many taxes are not progressive, and it is easy to argue that taxes on antisocial speedsters are to be preferred over vehicle registration fees or even over taxes on gallons of gasoline. Moreover, when it comes to taxes as discouragements, we tend to be sympathetic even when we know the impact to be regressive. Thus, high taxes on tobacco are widely accepted, though these taxes might now be thought go in the direction of internalizing the harm from second-hand smoke, or perhaps, the health costs likely borne by government in the future. A different version of the regressivity argument is that a $1,000 fine can be life-changing for a poor person, but a mere bump in the road for a rich and fast driver. This does seem offensive, or at least not in keeping with most of our criminal law system. Many people gamble with the enforcement system (and their own safety) by driving very fast. A system that sent a poor violator to jail and a wealthy one to her checkbook for a $3,000 fine, say, would probably be approved by economists but voted down by most other citizens. It is a bit like a criminal system that allowed people to buy out of prison time by paying a daily fee that only wealthy persons could afford. I suppose Virginia could have tried to be just a bit more populist by saying that the fine would be $1,000 for anyone earning less than $50,000 per year, and $2,000 for anyone reporting income above that, but such a system becomes expensive to administer and then raises other legal objections.
Economists will also like the fact that the new law stays away from violations that might be cost-benefit justified. A $1,000 fine for littering might chill behavior that is reasonable but that runs the risk of letting trash fly about. A $1,000 fine for illegal parking will deter drivers from double parking for a minute as they run into to deliver a package, when in fact such illegal parking is probably efficient compared to 30 minutes of circling about in search of a legal spot. A $1,000 fine for failure to wear a seatbelt is a bit more complicated. It might encourage more compliance with that (mostly paternalistic) rule, but in principle the value of wearing a seatbelt on a given trip is much less than $1,000. On the other hand, the social cost of speeding (even at 80 mph) is probably less than $1,000 discounted by the chance of detection. It is tempting to say that these fines-as-revenue-raisers are attractive to most citizens where there is the intuition that the fine (taking enforcement probabilities into account) is a reasonable estimate of, or at least bears some relation to, the social cost imposed by the violator. I think this sort of intuition is what has made tobacco and gasoline taxes widely accepted, and perhaps a similar case could be made for extreme speeding. But that message is clouded by imposing a similar fine on an unlicensed driver (for that is a different problem) and by excluding non-residents.