I would argue that the punishment must always be more severe than the crime, or else there is no deterrent value.

If I steal $100 from you, and my punishment is only a $100 fine if caught, then I risk nothing. If I am successful I am $100 richer, if caught then I have paid no greater penalty than what I was able to gain anyway.

On the other hand, if theft of $100 led to a year of forced labor, then I might think twice about stealing a wallet.

True. But I think the legal system isn't designed to prevent crime but rather give justice to those who crimes are committed against. Even in states where there is a death penalty crimes are still committed that cause people to be put to death. Though it does lower the crime rate it still won't fully prevent it.

Not all criminals would think things through but harsher consequences wouldn't hurt either.