Graduate tax grievances
A graduate tax would set a worrying precedent. The implication from Vince Cable that anything correlated with increased income should be taxed leads to absurd conclusions. What next? A tall tax? Or a man tax?
Actually, those seemingly silly suggestions could actually make more sense; such is the absurdity of the proposal. Someone being a man or being tall is at least a partially pre-determined, in-built bias, and it is arguably less objectionable to tax something arbitrary like that, providing that it doesn’t change behaviour, than something that makes worthwhile behaviour less attractive. Ambitious, motivated young students may decide that getting a degree is not worth the trouble if the average gains from further education are all but wiped out by the tax.
Furthermore, if the tax were to be implemented at the 5% level that the National Union of Students (NUS) has suggested to Lord Browne, this would almost certainly be too high. Most econometric studies to work out the earnings boost a degree provides are based on long term data analysis, over a period where generally only the best and brightest studied at university, a scenario that is far removed from the present reality where many objectively unsuitable candidates are given places on courses with little potential to add value. Of course it can then be argued that someone who falls into this category would only start paying the tax over the £15,000 threshold the NUS recommends, but then these higher earnings could be the result of hard graft post qualification, or additional training, not the BA in media studies obtained a decade beforehand.
Whilst the graduate-tax model may be a suitable funding mechanism for some courses at some institutions (particularly for career-oriented degrees such as Medicine and Law), the bottom line is that universities should be free to fund their courses and research in whatever way they see fit, be that through higher (or even variable) tuition fees, a percentage of future earnings, or anything else.