The Graduate Tax

Vince Cable, the Business Secretary, is proposing a Graduate Tax to replace student loans:

He said he had asked Lord Browne to look at the idea of a graduate tax "as a priority" in his current review in to higher education funding in England.

This would mean students paying for their studies through the tax system, rather than through subsidised loans.

He said high-earning graduates would pay more than those on low incomes.

Right, let's look at why this is wrong. Why it is more than just wrong - why it is both dumb and appalling. And let's do that through an analogy.

Two students walk into the students union shop to claim a free pen when they first start their degrees. One student uses his pen to take lots of notes on lectures and seminars during his time at university. The other uses his pen to draw genitals in various library books. The former gets a first, the latter a third. Is then right to slap the former with a hefty charge for his pen (in part to fund the pen of the latter) because he managed to put it to much better use than the latter? Because that is what this tax is effectively trying to do.

If you do well at university, and consequently get a high paying job, you will end up earning more than someone who spunked away their time at university in various bars. However, you will have used the benefit of a university education far better than the person who just used it as a chance to party for three years. However, under a graduate tax, you would pay more than someone who did bugger all at university. You would pay more for having done well at your studies. You would end up paying for someone who has done less well than you, on account of nothing other than their relative failure.

On what planet is that fair? On what planet is that not penalising those who work harder at university? And is that the sort of society we want to be? Where we charge those who work harder more than those who waste their opportunities? Do we really want to disincentivise people from getting good degrees from good universities, and then going on to do good jobs?

Cable justifies it in this way:

"It surely can't be right that a teacher or care worker is expected to pay the same graduate contribution as a top commercial lawyer or surgeon," he said.

Well, yes, it can be right if they have all got degrees. It is like saying that it can't be right that a care worker has to pay the same as a commercial lawyer for a bottle of coke. It is right, given they are buying a commodity - through their own choice - of the same, or at least comparable, value. Sure, by all make your case that commercial lawyers earn too much relative to care workers, but the way to combat that is not something as regressive as a tax on the wealthy. It is to start getting people to question why there is such a wide disparity in salary between more vocational work and more commercial work. The way to change this - if you actually believe that this needs to be changed - is through changing attitudes. Not to further penalise the successful through regressive taxation.

And while we're on the subject, let's lay to rest the myth that those who earn more should pay more tax. Because the reality is they already do. Someone who earns £20,000 and gives up 25% of their earnings to the tax man will give £5,000 to the state. Someone who earns £40,000 and gives up 25% to the state would be losing £10,000. And that is assuming a flat tax rate across all earnings which, of course, does not exist.

All this achieves is creating a culture where those who have done well are made to pay more for their success than those who have done less well. The graduate tax is effectively saying "don't worry if you've got a third and are heading for the dole queue - the person who has just got a first and is heading for a decent job will fund your further education". It is nothing more than an example of the ever unworkable Marxist slogan "from each according to his abilities, to each according to his needs."

And this is supposed to be "radical" thinking on funding further education. Bollocks. Bollocks on stilts. This is absolutely typical of the mindset of modern political parties. Got a problem? Tax it. People drinking more than you would like? Increase the tax on booze. Do the same thing if you have an issue with smoking. Too much congestion? Try a tax. Further education a problem? Here's a thought - try tax. If it moves, tax it.

In short, there is nothing radical about tax, and in particular about tax increases. They are the norm, not the exception. You want to be genuinely radical about universities? Why not start thinking about reducing the number of people who go to universities? If you want to think the unthinkable, why not consider having fewer universities? Why not consider abandoning the arbitrary target set by Blair for university placements? Why not entertain the idea that some people might be better served by not going to university?

A graduate tax would be a further corruption and devaluation of the university system in this country. It would further extend the idea of entitlement at the expense of others in this country. If the Tories have an ounce of backbone or dignity, they will kill this idea from the socialist-in-denial Cable right now. It is wrong, it is unfair, and it needs to be stopped.