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From parking tickets to tax fines and punitive damages, legal sanctions matter in people’s lives. Yet neither the legal nor the economics literature offers a comprehensive treatment of sanctions. Their practical complexity is not well understood, and their theoretical analysis is fragmented. This Essay addresses both limitations using tax law as a primary example. Sanctions are complex because they vary along at least six different dimensions: aggressiveness, magnitude, culpability, effort to comply, likelihood of detection, and offense history. These six degrees of sanction graduation are distinct, and potentially independent, but often intertwined in obscure and perplexing ways. After clarifying the unique nature of each degree (or axis) of graduation, this Essay reviews the literature in search of the economic rationale for varying sanctions along each axis in light of the incentives such variation creates. I conclude that three graduation axes of great practical significance—aggressiveness, culpability, and offense history—are the least developed theoretically. Two other dimensions—the likelihood of detection and the effort to comply with the law—are more conceptually advanced, although the theory is still fairly removed from the enforcement realities. In contrast, economic analysis reveals a good grasp of the magnitude axis and a clear path to modelling the real-life features that have remained overlooked thus far. By highlighting the complexity of sanctioning regimes and emphasizing the related theoretical successes and shortcomings, this Essay identifies fruitful areas of future research, some of which I pursue in related work.