This approach raises some interesting questions about how the legal system deals with inequality. Because of the quite varied earnings between the different victims, some had to be offered much more than others to draw them away from litigation. Should the legal system follow a similar pattern in the opposite direction? That is, should fines or other monetary penalties routinely be keyed to a violator's income?
I suppose that confiscations accompanying criminal convictions are one routine way of reflecting a convict's wealth in their punishment. Finland has pushed this type of income-based fine a bit further, with traffic fines set as a small percentage of income. I'd appreciate any advice on similar structures in American law.
Setting fines proportional to income may overcome some problems associated with classic market approaches to social problems. For example, in Aging and Old Age, Posner claims that we needn't aggressively screen out aging drivers, because the insurance market will eventually deter the most dangerous by raising their premia. But such market "signals" will inevitably become both more under- and over-inclusive as inequality increases...wealthier people will find them meaningless and poorer people will find them insurmountable barriers to driving. Fines based on income could help send a more meaningful signal.