Is the Joker based on another character, or a real life person?
According to this article, Batman creators Bob Kane and Bill Finger created the Joker based on a combination of the playing card (obviously) and the character played by Conrad Veidt in the 1928 silent movie The Man Who Laughs, who looked like this:
And in the middle picture here, side by side with the card and the Batman villain:
Compare with the earliest Joker design in the comics:
The article quotes Bob Kane saying:
Bill Finger and I created the Joker. Bill was the writer. Jerry Robinson came to me with a playing card of the Joker. That’s the way I sum it up. But he looks like Conrad Veidt – you know, the actor in The Man Who Laughs… So Bill Finger had a book with a photograph of Conrad Veidt and showed it to me and said, “Here’s the Joker.”
And here's the description of the character in The Man Who Laughs, who always had a smile on his face because he'd been disfigured as a child:
Based on Victor Hugo’s novel L’Homme Qui Rit, The Man Who Laughs tells the tale of Gwynplaine, a man who had a permanent smile carved into his face as a child as punishment for having a rebel-rousing nobleman for a father. Deformed, he now works in a traveling circus and is in a relationship with a blind woman named Dea. Matters get complicated when the femme fatale Duchess Josiana takes a perverse fancy to him and the Queen learns of Gwynplaine’s noble lineage.