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Laffer's Day in Court: The Revenue Effects of Criminal Justice Fees and Fines

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Listed:
  • 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.

Suggested Citation

  • Samuel Norris & Evan K. Rose, 2023. "Laffer's Day in Court: The Revenue Effects of Criminal Justice Fees and Fines," NBER Working Papers 31806, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:31806
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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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