BOHANON & CUROTT: State sometimes benefits too much from civil forfeiture

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Economic Analysis by Cecil Bohanon & Nick CurottIn 2012, Hoosier Tyson Timbs was caught with $260 in heroin—a crime punishable by a fine up to $10,000. The state of Indiana confiscated Timbs’ $42,000 Land Rover. Since Timbs was driving the vehicle when he committed the crime, it was seized under the provisions of civil asset forfeiture. Timbs argues this violates his Eighth Amendment rights prohibiting the imposition of excessive fines. Now the Supreme Court of the United States will weigh in on the issue in Timbs v. Indiana.

Economists have long viewed legally imposed fines, forfeitures, jail sentences or other sanctions as a “price” imposed on an activity viewed to be undesirable. Raise the price, folks engage in less of the activity. Incentives matter.

However, raise the price too high and punishment becomes disproportionate to the nature of the crime. It might be reasonable to increase parking fines from $10 to $25 to deter illegal parking, but few would call for the death penalty for parking tickets. Our Constitution’s architects recognized that legislative and administrative processes might impose prices that are too high. They therefore enshrined rights to due process and prohibitions against torture and excessive fines.

However, normal constitutional protections do not apply in civil asset forfeiture cases. Indiana law only requires property seized under civil forfeiture to be connected to a crime on the preponderance of evidence not beyond a reasonable doubt. Even more troubling, in 25 states law enforcement authorities get to keep 100 percent of the proceeds. This leads economists and others to believe civil asset forfeiture is an overused and misused tool of law enforcement. The authorities that impose punishments are also subject to incentives.

It is rather ironic that the case before the Supreme Court is from Indiana, as our law enforcement doesn’t get to keep the proceeds from forfeited property. The Indiana Constitution directs it to the state school fund. Nevertheless, Indiana law enforcement has benefited from federal civil forfeiture laws. Equitable-sharing rules allow state and local law enforcement to team with the federal government to forfeit property under federal law instead of state law. From 2000-2015, Indiana law enforcement received more than $55 million under this arrangement.

Punishments should be steep enough to deter crime but not excessive. It seems excessive to us to take $42,000 in property for a crime that rates a fine of only $10,000. If the Supreme Court rules in favor of Timbs, it will help protect citizens’ property from abusive law enforcement.•

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Bohanon and Curott are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.

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