As the Telegraph reports:
Graduates aged in their 40s and above who benefited from a free university education should pay a retrospective tax to help fund the current generation of students, a new report has suggested.
Researchers at the UCL Institute of Education have set out proposals for a new "all-age graduate tax" that could be used to bring down tuition fees that currently cost students up to £9,250 per year.
I do not think that there is any chance of this happening, but politically I think this a very astute move. Many people of my generation seem to think it quite acceptable to land the younger generation with debt (whilst many seem to work hard to avoid their own children having to pay it) without any regard at all for the all the benefits, including near free university education, that they enjoyed. This proposal creates a level playing field and I very strongly suspect that Corporal Jones reactions will be heard, or to put it another way, 'They won't like it up them".
Well played by the Institute of Education in that case. Calling people's bluff is a great way of delivering a point and this does that really well.
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If we believe that education should be free, as I do, as an investment in a country’s future then better to make it so and increase all taxes if that is required.
I agree
I think this move supports that
You don’t need to increase any existing taxes to fund education.
You don’t need to implement a new tax to fund education either.
Tax doesn’t fund anything.
It is collected to control inflation and stimulate desire for, and thus the value of, Sterling (because you have to pay your taxes in Sterling and because it is the only legal tender in the UK).
You fund education by deciding that it is an alienable right, an individual and public and commercial good, and a moral imperative.
Then you go and create the money necessary to fund the building of schools, buy resources and to pay the teachers’ wages.
You create the money by telling the Bank of England how much you want, they go and tap the numbers in, and the government then uses the money to pay people to build and teach.
Simples.
Money is never in short supply when you can create your own.
Graduates pay 9% on everything above £21,000 to repay their loan.
If this money was used to spend on stuff, the additional demand could push up inflation.
To combat this, a rise in tax could be needed. Tax doesn’t fund spending, however tax may be needed to keep inflation in check when spending increases demand in excess of supply.
Totally impratical and unfair deciding to try and tax someone maybe 50 years later. How are they going to get list of graduates ? from 40 or 50 years ago – and current addresses ? What about those who have died or moved abroad ? Fantasy politics. Surely if a degree was that great a benefit the holders would have earnt more and paid more income tax. It’s not calling peoples bluff because i can’t remember anyone saying this was a good idea in the first place for their bluff to be called. Idiocy.
I do not think anyone believes this will happen
What it does is point out the injustice of this tax on the young
It would appear that ‘bobgarrod’ is filling in for Corporal Jones who is away on official leave.
Richard
I agree completely although I think it is worth gathering all of the valid objections, if only to be able to marshall them should some lunatic politician try to enact such a policy.
We were peers at Southampton in the 70s (though I don’t believe we ever met unless you hung around with Physiology & Biochemistry students in Boldrewood). Student grants were means tested and scaled so that I received a full grant due to very low parental income whereas the girl who later became my wife received only £50 because her father refused to declare his income. Her older sister paid her fees and she had to find work in order to pay for living costs. None of that or similar information will reliably be recorded anywhere unless it’s “on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”!
The only P&B I knew was Peter Emery and I’m not sure he was there often….
I recall the grant all too well
It was why I worked a lot of holidays. But let’s be clear: that meant I was largely debt free. Working holidays would not do that now
Ah, Peter Emery – chief recruiter for the Federation of Conservative Students as I recall…. 😉
But then he had the wisdom to leave them behind
He was an independent when student union president
We still talk occasionally
The difference of course much less of the baby boomers when to university in the first place, and there was almost certainly much less non courses such as football studies, event management, hair and beauty, hospitality and the like. Thats not to mention that tax was higher then as well. The current young take for granted a lot of things the boomers didnt have in the earlier years. For instance the eldest of them had rationing til they were around 8. The trip abroad equally many didn’t have them. How many of them had cars when only 18-19?. And now they are rewarded with the second worst state pension in europe.
I’m a boomer, born well after rationing ended
And wee had some compensations too. I won’t list them all….
There were indeed fewer students at university, but polytechnic and college of higher education students also received means-tested grants and had their fees paid for them. Even in the 1970s, there were vocational courses, which “Sam” would no doubt sneer at.
And many were very good
It starts to highlight the great injustice to youth by successive Govt’s. What puzzles me is why Labour introduced fees, I can only conclude that Blair was taking advice from the financial sector rather than the labour movement, that has been grossly injured by neoliberalism and entrists such as Blair.
@marco Fante – its not corporal joneish (whatever that means) to think that backdated taxes are a bad idea in theory and in practice. In theory it’s bad because it is unfair to backdate taxes for decisions taken in the past – it rules out certainty because if you do it once it can be done for anything depending on the whim of the ruling party. Secondly it is bad in practice – from an administration point of view and fairness. If you believe that the state should suddenly backdate taxes as it sees fit – then thats not the sort of society i want to live in. The question of paying for degrees is another matter entirely. This idea is not the answer.
There is nothing backdated about this proposal. It would be on current incomes
In practice, I am quite sure this is, anyway, a tongue in cheek proposal
What it does say is we need to discuss more progressive taxation generally
They certainly won’t have the money..especially if it is indexed..!
You mention Corporal Jones. What of the earlier students who had to do National Service, two years on a pittance and many seeing active service? Also, what of those who have done voluntary work for a period or some other similar community service? Another issue is that these days a great deal of housing is subsidised which was not the case for many former students who were paying market prices on their rentals. Last but not least a good many students had grants etc. because a high proportion went into teaching, a form of hidden subsidy for teacher training at graduate level at that time before all the reorganisations of the 1970’s and later.
As I said, this will not happen
But by simply raising the questions it shows the injustice of hypothecated taxes of this sort
Haven’t the baby boomers already paid that tax as the much higher incomes they were expected to earn for having a degree in the first place? That’s an argument the Student Loans Company still uses today but so many people go to university I suspect the premium of a degree doesn’t equate to much.
I know far too many baby boomers who have learnt how to squirrel away their money into offshore set ups to avoid tax. Such a tax on baby boomer graduates would be fair from what I have seen.
People who call themselves middle class progressives and then use trusts to avoid tax………..!?
If the treasury taxed Hypocrisy in this country, it would be very well off indeed.
The comments section on the original Telegraph article has definitely been the highlight of my day.
Are we suggesting that graduates who earn more should pay more tax? Surely we already have a graduated income tax system, which requires those who earn more to pay tax at a high rate. (One cardinal error with the current system of university financing was Tony Blair’s political decision to badge it as a loan rather than being more honest and describing it as a graduate tax, which is what it is. But you can’t increase taxes, can you?)
If we are changing tax rates, we should increase the rate of capital gains tax closer to 40% – the rates of income tax and capital gains tax were aligned with income tax through the 1980s and 1990s until Gordon Brown’s introduced taper relief – and also put the rate of corporation tax up again to at least 20%.
In whatever context, it’s time once and for all to stop correlating the tax take with government spending (investment). If the economy is continually framed in such a way – especially on a progressive blog such as this – we’ll never get out from under Neo-liberal oppression.
Neo-liberal oppression will endure until tertiary education becomes a universal standard and all our young people are able to study for fulfilling courses which lead on to useful careers in teaching, local government and other essential services.
Thank goodness that Richard is in the vanguard of this movement and that his students at City University at least will not be brainwashed into accepting conventional received ideas on e.g. the bond market and the Tory pap of the MSM.
John McDonnell would be well advised to make his peace and welcome Richard back onto his team as a – if not THE – leading adviser.
I hope the Party conference will embrace and adopt Richard’s substantial contributions and if that means that a new period of rationing is required from the rest of us, then so be it.
What are you talking about?
For the sake of accuracy and to avoid unnecessary dissent I probably should have written ‘DIRECTLY correlating’ – lol 🙂
While I enjoy the prospect of the confusion this would cause middle aged, middle class faux left poseurs, retrospective legislation is inherently unjust. Had those folks known this would happen back then in 1975 they might have opted to become gas fitters instead, and in many cases made more money.
University is frequently just unemployment postponed and it seems reasonable to fund it out of a fair and progressive tax system, probably with a wealth / land value element in the mix.
It’s not going to happen
It just shows how unfair graduate taxes are
That was why I posted the piece
One of the inherent difficulties we have with ‘education’ (I put it in inverted commas because much of it is training and that in my estimation is different) is that we can readily calculate what it costs, but evaluating what it’s worth is so much more complicated.
Curious that it’s the free market proponents who tend to be the first to complain when the state doesn’t supply it with the perfectly skilled, oven-ready workforce.
Education in theory should be a public good, but the idea of the public good seems to be somewhat out of favour.
It’s a bit like old people demanding that the youth do national service. If they’re so keen on national service they can go and do it again.
If this happened, I know you are saying it is unlikely, but I would find this to be a personal finance disaster. The whole financial crisis and a badly timed (in terms of my career) redundancy, seeing my actual salary decrease by 10% and in real terms by a whole lot more, seeing my eldest of three children about to go to Uni (with one of the other two also highly likely to go), the loss of Child Benefit and me and my wife having to pay an additional tax….
We are JAMs. This would turn us into NNMs (nowhere near managing). I know it is all relative and I’m doing better than many, so perhaps I’m being selfish, but in my opinion this is definitely lousy politics and no way would I vote for a party that proposed it unless they gave me something back.
Sorry if my reaction disappoints you,
Jonesy
I’ve been thinking about this graduate tax and I suspect it’s missing the point in a fairly basic way.
I agree that there is justice in saying that if you are going to have a graduate tax it should apply to graduates irrespective of when they graduated. It’s not a very practical idea though and if it was going to be ‘fair’ it would be incrementally higher for ‘better’ universities, and for higher degrees and doctorates and the arguments would be interminable.
What the whole notion of a graduate tax ignores is that as a public good everyone gains from having a better educated population.
If as is claimed (and seems to have been widely true) further education enhances an individual’s earning power then a well constructed income tax structure would recover that in the course of a working lifetime. The people who do well materially without such qualifications have no legitimate beef because they benefit aswell from living and working in this better social environment.
Much of the confusion stems from the perceived superiority of academic prowess above practical skills, and the social class conflicts that has traditionally created or reinforced.
Some of a society’s requirements are not well provided by a competitive market system. I think education is one of them and health provision is another. There are others but let’s not go there now.