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Graduate Tax

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Guest DissipatedYouthIsValuable

Being mooted on Radio 4 this morning.

How much did you pay for your degree, Vince?

Flat fees not enough to pay for your generation's promises to itself?

Edited by DissipatedYouthIsValuable

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I wonder if this will be a retrospective tax. Will the tax apply to everyone that has a degree including vince? Will you be taxed more for a masters? I can see this being extra complicated to administrate if this isn't retrospective. And what is stopping people from lieing about not having a degree? The more you think about it the less it seems to work. What about foreigners working in the uk who have a degree? What is stopping you emigrating? What about people who dropped out after 1 year or two? What about open university graduates who have paid for it themselves and done it in there spare time? What happens if you were born/lived in scotland and had free uni. What happens if your working in scotland but you went to uni in the uk?

Vince has been saying that somone who goes to uni earns an extra 100k PA after tax during there lifetime of work. The average grad works for 35 years, so that is an extra income of 2.8k PA, or 230 quid a month extra. realistically due to the laffer curve they cant take much of this, 10% sounds sensible, so are they talking about taxing grads an extra 23quid a month, seems like alot of hastle for an extra £23 quid a month? and 10% of 100k is only 10k which is less that what they currently bring in. IMHO they are looking for 30k of tax per student, but because it is over there entire working lives they will want more 60k? IMHO at that level the tax wont work

Edited by AteMoose

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Being mooted on Radio 4 this morning.

How much did you pay for your degree, Vince?

Flat fees not enough to pay for your generation's promises to itself?

Unfortunately the problem lies with labour's policies. It was their destruction of gcse and a level exam which has made them meaningless. It was the expansion of pointless university courses and people being sold a false dream.

To add to our troubles the once great british university system has been eroded down.

Its a great shame that this tax will have to come in. But we're the ones to blame when we believed the labour party and its agenda for social engineering and if be bought into their unfunded dreams.

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I wonder if this will be a retrospective tax.  Will the tax apply to everyone that has a degree including vince?  Will you be taxed more for a masters?  I can see this being extra complicated to administrate if this isn't retrospective.  And what is stopping people from lieing about not having a degree? The more you think about it the less it seems to work. What about foreigners working in the uk who have a degree? What is stopping you emigrating?

All sorts of questions are raised by this, including the ones you raise. A major threat must be a brain drain. If you no longer have to pay off a student loan but are instead taxed at a higher rate, it makes working (and paying tax) abroad a far more attractive prospect than staying in the UK for graduates.

I don't see how this can be applied retrospectively with any chance of fairness. If it is a simple graduate tax, then:

1. those who benefitted from free university education and grants would end up paying back some of their gains, but will be getting close to the end of their working lives so are unlikely to pay back the costs. In addition these people have benefitted from an era when degrees were realtively rare and exceedingly beneficial.

2. those who have had student loans and already paid them back would be severely hit - paying for their education twice.

3. those who choose to skive at university and/or don't get an above average paying job will never pay back their share (and with 50% university attendance rates these will make up a large proportion of graduates).

4. those who get degrees and end up in well paid jobs will have a tax rate above 50% (given that higher rate income tax is already at 50%)

I look forward to seeing the detail of this proposal.

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I heard Vince on the radio trying to justify this saying that on average, graduates earn more than everyone else. Surely, on an individual level, if you earn more you pay more anyway.

In my situation, for instance, I do have a degree but I don't need it for my job in IT. My colleague, who does pretty much the exact same thing, went straight from school to work. I don't understand the logic in taxing me more than him.

If it is retrospective, can I give my degree back? I really don't need it anymore as my CV is now what counts.

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Being mooted on Radio 4 this morning.

How much did you pay for your degree, Vince?

Flat fees not enough to pay for your generation's promises to itself?

If we're going to charge graduates for their use of higher education perhaps we can charge the old for their use of the NHS?

Edited by Andy D

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How about having a 2-tier tax system. We can assume that those who go to university have a higher earning potential. Its a bit stupid having to worry about doing the red tape for all employees worring about if they went to university and what year they went and which country. Instead we could just have a lower tax for those with lower incomes set at say 20% and then for people earning more than, lets say 40k have to pay 40% tax.

:ph34r::ph34r::ph34r:

Edit to say: Ooh look - its my 500th post! Bit slow considering ive been here nealy 3 years

Edited by angrypirate

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Vince has been saying that somone who goes to uni earns an extra 100k PA after tax during there lifetime of work. The average grad works for 35 years, so that is an extra income of 2.8k PA, or 230 quid a month extra. realistically due to the laffer curve they cant take much of this, 10% sounds sensible, so are they talking about taxing grads an extra 23quid a month, seems like alot of hastle for an extra £23 quid a month? and 10% of 100k is only 10k which is less that what they currently bring in. IMHO they are looking for 30k of tax per student, but because it is over there entire working lives they will want more 60k? IMHO at that level the tax wont work

Well, given that he stated is was 100k net of tax, then assuming that they are paying approx 40% overall tax on that additional sum (once we include both sets of NI, and perhaps an amount of upper rate tax) then surely they are already paying in the region of 50 - 100K extra income tax anyway?

Before we even start looking at vat, booze tax or stamp duty.

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How about having a 2-tier tax system. We can assume that those who go to university have a higher earning potential. Its a bit stupid having to worry about doing the red tape for all employees worring about if they went to university and what year they went and which country. Instead we could just have a lower tax for those with lower incomes set at say 20% and then for people earning more than, lets say 40k have to pay 40% tax.

:ph34r::ph34r::ph34r:

Edit to say: Ooh look - its my 500th post! Bit slow considering ive been here nealy 3 years

Nah, that's been tried and it didn't work. It's clearly far too simple and sensible.

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What about those who studied through OU etc?

You have to pay for the OU yourself, so I guess getting the state to pay and then paying "graduate tax" is an option. It would be nice if you had the choice - i.e. you could continue to pay for your own (or your employee's) tuition up front.

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Maybe some young people would want to look at the fees in Dutch,German,Austrian, Spanish..... universities. 1K EUR and under.

Some courses even given in English.

As for the proposed £14K p.a. fees for science and engineering? :blink:

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Isn't this just a Lib-Dem time-waster?

Lord Browne is is looking into Uni funding, why not wait?

Whats it got to do with the Business Secretary anyway?

This is just about saving face. Back in more prosperous days when tax receipts were plentiful the Lib Dems promised to abolish Uni fees. Even if that was ever feasible, it certainly isn't now and, when the sums don't add up, the Lib Dems always go for Income Tax to balance the books.

Cable should get on with doing his job and stop wasting precious government time. The current system isn't perfect but there are all sorts of problems with a graduate tax as well. That is why Lord Browne is putting together all the arguments.

It seems like the challenge of trying to keep business going during the worst ever recession isn't enough for him!

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There should be a height tax, since taller people (apparently) tend to get better jobs! :blink:

On the same grounds there should be an ugly rebate! ;)

Edited by MrPin

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It would be nice if you had the choice - i.e. you could continue to pay for your own (or your employee's) tuition up front.

That sounds really fair. Those who are rich can make sure their children pay reduced tax for life, whilst those from poorer backgrounds can receive a bonus tax to keep them in their place, roll on the cast system!

I have to say as a Lib Dem voter and former big fan of Vince, this policy is utter pants, shame on him! On so many levels it is unjust and the logic flawed. I can't believe how some people have labelled it "progressive". In what sense? Univerisity numbers should simply be cut and funding switched towards subjects where we as a nation have a set stratgic priorities (nursing, medical, science, dare I say IT).

Perhaps university graduates currently approaching retirement who will largely escape this tax could simply have a large chunk of their tax free payment from their final salary pension confiscated to pay for their university education? .... thought not

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Isn't this just a Lib-Dem time-waster?

Lord Browne is is looking into Uni funding, why not wait?

Whats it got to do with the Business Secretary anyway?

This is just about saving face. Back in more prosperous days when tax receipts were plentiful the Lib Dems promised to abolish Uni fees. Even if that was ever feasible, it certainly isn't now and, when the sums don't add up, the Lib Dems always go for Income Tax to balance the books.

Cable should get on with doing his job and stop wasting precious government time. The current system isn't perfect but there are all sorts of problems with a graduate tax as well. That is why Lord Browne is putting together all the arguments.

It seems like the challenge of trying to keep business going during the worst ever recession isn't enough for him!

This is a waste of time - if you want to tax people who earn more why not put up um.....income tax?

lots of people with degrees do earn more (doctors, lawyers etc.) however lots of others need degrees but don't necessarily earn that much, eg. social workers. So instead of taxing graduates why not focus on high earners using - I know! - income tax!

it's a disgrace that Vince's generation didn't pay a penny for their degrees (even got given grants) but now he thinks it is ok to waste his tax payer funded time coming up with rubbish ideas like this.

maybe Vince's generation could help fund education by paying more income tax - oh wait that won't be very popular. Let's tax graduates instead.

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Vinces' other great idea is to make degrees a 2 year course. Why 2 years? Why not 1 year? Or 1 Month? why not give them out to everyone? Most of them are worthless anyway.

What is really needed is to close a lot of the useless ones. Cut the benefits of the scivers not increase the taxes of the few that work.

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I thought we paid for the education system already - in general taxation.

tbh a general graduate tax, retrospective - or perhaps a reduction in personal allowances - would be a better idea than increased fees and I'd be happy to do my bit if it meant today's students (& my kids in 6-8 years' time) not being loaded up with debt.

a tax on those grads like me who benefited from free education in the 60s, 70s and 80s would be very fair ... though identifying who pays it could be a nightmare.

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How about having a 2-tier tax system.

Why stop at 2 teir? It's apparent that the objective is to get the young to pay more tax, regardless of income or contribution to society, so why not just have a sliding scale of, oh, income tax= 90% of income - your age in years? Young people dont vote, anyhow, so I'm sure it's be no trouble to bring in.

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That sounds really fair. Those who are rich can make sure their children pay reduced tax for life, whilst those from poorer backgrounds can receive a bonus tax to keep them in their place, roll on the cast system!

Fair, you mean like expecting a non-graduate like me, who has been paying tax since 18 (and at higher rate since 23) for some hopeless case to spend a life bouncing around higher education from one daft course to another?

Giving you the choice to front-load or post-pay for your education seems perfectly reasonable to me. It has to be paid for somehow and expecting those who don't benefit to sign blank cheques is a tad naïve.

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Fair, you mean like expecting a non-graduate like me, who has been paying tax since 18 (and at higher rate since 23) for some hopeless case to spend a life bouncing around higher education from one daft course to another?

Giving you the choice to front-load or post-pay for your education seems perfectly reasonable to me. It has to be paid for somehow and expecting those who don't benefit to sign blank cheques is a tad naïve.

That's the price you pay for benefiting from doctors, engineers, scientists, "arts-people" etc. You do still want doctors et al?

Or would you like to make all public services PAYG?

Edited by daiking

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[quote name=Oh Well :(' date='15 July 2010 - 12:37 PM' timestamp='1279193878' post='2622475]

Vinces' other great idea is to make degrees a 2 year course. Why 2 years? Why not 1 year? Or 1 Month? why not give them out to everyone? Most of them are worthless anyway.

What is really needed is to close a lot of the useless ones. Cut the benefits of the scivers not increase the taxes of the few that work.

They don't want to do that since it keeps the mirage going that everyone can be employed. It's hidden the unemployment that has arisen as we have offshored and increased productivity as we've needed less and less workers.

If they cut to the numbers we truly need they'd effectively double the number of 18-23 year olds who are long term unemployed. Remember these won't come from the bottom 20% of society but rather from the 20-60% grouping, i.e. the lower class to part way through the middle classes. They'd be just sat there on the dole for years and years as society doesnt need their economic output.

These individuals would be much more likely to be politically active than the chav dolee's, so shoving them on to the dole long term would be like storing gunpowder next to a bonfire. It's the stuff revolutions are made from - there's a strong link between high unemployment and civil unrest/government overthrow. Not surprisingly, the government doesnt want this to happen, and so wishes to keep them active/entertained to prevent it. University is the modern equivalent of roman bread & circuses for our young.

Even better its self-funded to an extent.

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I thought we paid for the education system already - in general taxation.

tbh a general graduate tax, retrospective - or perhaps a reduction in personal allowances - would be a better idea than increased fees and I'd be happy to do my bit if it meant today's students (& my kids in 6-8 years' time) not being loaded up with debt.

a tax on those grads like me who benefited from free education in the 60s, 70s and 80s would be very fair ... though identifying who pays it could be a nightmare.

Surely a debt you can repay, is better than a tax for life?

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