Why a graduate tax is a bad idea

Why not? Why not go futher and create insentives (discounts) for degrees that add value to the economy like Engineering.

The idea that graduates should pay has been accepted by the majority. The unfairness that needs to be addressed concerns all those that did not pay before 2006. This should be addressed by taxing all graduates no matter how long ago they graduated. This would have the benefit of giving an immediate boost to the treasury. The figure of 2.5% has been suggested but that seems far too low, 5% seems more reasonable.

Questions

I graduated in the late 60's and now retired so do I get taxed on my pension?

I also have a PhD so do I taxed for that as well?

My kids are paying off student loans, do they get taxed as graduates too?

Having said that I was one of the 5% that went to University in those days and even got a grant to pay for my living expenses. However I did pay all of my kids living costs.

The problem now is that University is being used as a substitute for employment to keep the numbers down. Do we really believe that 50% of the population are bright enough to get there and how come the majority get a 2.1 or first these days?

I think its a good idea. The state will provide a free university education, and in return the graduate will be subject to an extra percent or two on income tax. Since the education should provide additional earning potential, this seems like a good quid pro quo. Better than having the millstone of a £15,000 debt at the start of someones working life.

I dont really understand how the system will work!

Will the universities receive the extra tax that their graduates pay? This would at least encourage the universities to provide places where job prospects were better.

I suspect that the extra tax will go into the coffers to be spent on the politicians' pet projects.

stan

We are often told that future prosperity lies in a knowledge based economy. If this is correct then the whole economy benefits from a better educated workforce. Therefore, shouldn't the state be funding higher education? The flip side of this, of course, is to abolish or refuse to pay for the recent spate of nonsense degrees like mejah studies.

The debate about how much the state should fund tertiary education, as opposed to the individual funding some/all of it, is a valid one. However, the proposal that anyone graduating should be subject to a tax for the rest of their working life (and into retirement?), which could equate to far more than the amount of any state subsidy, is a nonsense. By all means charge more for university education and make loans available. This at least allows the function of a market, which could well result in the demise of undersubscribed and pointless courses as well as forcing universities to improve their tuition. But to subsidise and then expect to overrecover just because someone has a degree totally ignores the extent to which their subsequent earnings is a result of effort and/or risk taking. Frankly I think Cable is off his head - this another stupid idea just like his mansion tax!

I agree Robert Rutherford - there are loans and grants available already to allow people to go to university for whatever they want to get out of it.

I am not against 'Mickey Mouse' degrees as everyone seems to be - this is a choice that people are entitled to make, as long as they pay for it - why not? Their future employers can choose to ignore the degree on applicants CV if they wish. If they want to study something that matters to them then that's something they can pay for. With a loan arrangement which covers the cost + some extra back to the gvmnt, the more mickey mouse courses the better!

People who object to particular degrees such as media studies or equine studies should first look at the syllabuses to see what really is included.

http://ww2.prospects.ac.uk/cms/ShowPage/Home_page/Find_courses_and_research_gs/p!eefXfmd?action=search&2waynocompress=1&keyword=&filter=subject%2F2031&filter=m%2FFT&x=33&y=10

It is also worth checking the employment levels six months after graduation by subject:

http://www.prospects.ac.uk/what_do_graduates_do.htm

You might be surprised.

I can't see how this graduate tax will work, there are too many complications. It could be another Poll Tax disaster.

So what defines a graduate?

Will it be the responsibility of the Universities to tell the tax man who has graduated?

What about the Open University where working students or retired people can take years to finish their courses (and often don't) and often do a degree out of interest rather than for work.

Will there be a market in "Off Shore" degrees ?

If I study Medicine or Chemistry (expensive to teach) will I pay the same as a Maths graduate?

This has all of the makings of an ill thought out policy that will be too complex to administer.

People who do degrees which are largely vocational, medicine, law, engineering etc will end up as higher rate tax payers (a sort of graduate tax).

I can't see why media studies and other jollys which generally lead to the Job Centre should be funded out of general taxation.

American students work to pay their way through college why shouldn't ours? It may need more flexibility from the universities about how courses are organised but should be possible.

Conflict of I interest; Like Dennis, I graduated in the 60's and have funded my kids university education.

Few will agree to paying 'just' 2.5% when they consider they may be doing so for up to 20 years! Consider the situation when after, say 10 years, you are earning 80-100k pa. On a rising salary the costs will mount!!!

I do not understand why students can not be seen as investing in themselves - like a business - they take out a loan - they take the repayment of the loan off their income take - like a business - why should businesses be treated one way because someone is investing in a wheel machine and a student investing in becoming a lawyer another

how about an a-level and gcse tax?

Jeremy Bosk is absolutely right about mickey mouse degrees but not the reason why people took them

The problem is that around 50% of 'new degrees do not offer higher earning potential and are mostly tied to the minimum wage. Any useful, but easy degrees were over subscribed and over supplied the market and brought those salaries down. New dgrees have been created to keep mediocre colleges up and running and academic staff in jobs. Tens of thousands of students, 'persuaded' by the Labour non government to take these Mickey Mouse degrees to meet politically motivated and social engineering targets, will have unpaid debts around their necks for 30 or 40 years and then the repayment will revert to the tax payer somewhere around 2050.

Gerryhearn medical and law degrees are not 'vocational' , they are professional. it is most truely vocational degrees which tend to be lower paid and used to be worth only a certificate or a diploma. What is a Diploma? Usually two years long and what are they going to make two years long now? The degrees that used to be diplomas! Labours mismanagement will be with us for years!!

fine to have a (graduate) tax to pay for tertiary education as long as all the content of every degree course in the UK is made openly available to all.

It wouldn't be democratic to tax us all and then deny us access for what we are paying.

Graduates generally earn more and therefore pay extra income tax anyway. At the current rate for tuition fees and assuming graduates earn £3000 pa more than non graduates, they cover their tuition fees in extra income tax in 8 years.

Am I missing something? No one has mentioned yet what is the rate of taxation for the graduate tax, you are all guessing that it will be about 2% and unless there is some sort of a cutoff you could imagine an 80 year old pensioner in 60 years time still paying it!

Taxes never go down, (remember how the vat rise to 17.5% was temporary!)