Friday, July 16, 2010

Tax is for Christmas, not just for Life

Following on from yesterday’s post, I hear that Mr Cable has said that it’s "unlikely" that a ‘Graduate Tax’ would be paid throughout a graduate's working life.

Hmmm. If that could be guaranteed then the system is slightly more appetising (in the same way that raw beef is slightly more appetising than raw chicken).  I’m not convinced, however, that the bureaucracy involved in deciding who pays what, and which Universities get what will lead to a simpler, cheaper and better system.

1 comment:

PB said...

A difficult one to call without all the details on the table, but remember that paying 9% of earnings over £15000 p.a. means that there's already a 'graduate tax' rate of 29% on earnings until it is fully repaid or the age-dependent cut-off date. This method does in fact penalise low-to-medium earners because (1) they have to borrow the money in the first place and actually use it for their studies (and not use it as a low interest loan to buy cars with), and (2) the seemingly random interest rates charged compound the debt and makes repayments greater the longer it takes.