Working Paper: NBER ID: w31806
Authors: Samuel Norris; Evan K. Rose
Abstract: Many jurisdictions levy sizable fines and fees (legal financial obligations, or LFOs) on criminal defendants. Proponents argue LFOs are a “tax on crime” that funds courts and provides deterrence; opponents argue they do neither. We examine the fiscal implications of lowering LFOs. Incentives to default generate a “Laffer” curve with revenue eventually decreasing in LFOs. Using detailed administrative data, however, we find few defendants demonstrably on the right-hand side of the curve. Those who are tend to be poor, Black, and charged with felonies. As a result, decreasing LFOs for the average defendant would come at substantial cost to governments.
Keywords: No keywords provided
JEL Codes: H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Legal Financial Obligations (LFOS) (G33) | Revenue (H29) |
| Legal Financial Obligations (LFOS) (G33) | Default Rates (E43) |
| Default Rates (E43) | Revenue (H29) |
| Legal Financial Obligations (LFOS) (G33) | Payment Behavior (D19) |
| Payment Behavior (D19) | Revenue (H29) |
| Legal Financial Obligations (LFOS) (G33) | Predicted Payment Rates (J33) |
| Predicted Payment Rates (J33) | Revenue Loss (H29) |
| Reduction in Legal Financial Obligations (LFOS) (G33) | Revenue (H29) |