The Benefits of Taxing Graduates

As someone who graduated from University only a few weeks ago, it may seem strange to read that I am fully in favour of plans for a "graduate tax". Unveiled this week by Business Secretary, Vince Cable, an extra income tax for graduates would replace the current system of tuition fees. In my opinion, this is a long overdue reform.

Tuition fees, as a flat levy on all those who attend University, are a hugely regressive measure. A graduate who goes on to work for a large City law firm has the potential to earn massive sums of money each year. A graduate who chooses to work as a teacher, or a social worker, will never see such pay checks. Despite this, both graduates will be liable for the same debt repayment. How on earth can this be right?

A graduate tax will ensure that those who benefit most from a University education will pay back the most. Those who choose to pursue a career solely dedicated to monetary enrichment will have to pay back more than those who choose to enter into socially beneficial careers, or those unable to reach the same heights.

Some say that a graduate tax will stifle ambition. This is a pretty standard argument against progressive taxation. I would place a bet - a University leaver who accepts a place on a Goldman Sachs graduate scheme will not be hugely damaged by an extra 1 or 2 per cent added to their income tax. A person with the intellectual capacity to aspire to these kind of jobs will not be deterred from applying to University because of the massive earnings potential they will still be able to exploit. By contrast, there is a very real risk that a young person hoping to be a teacher will be discouraged from making an application if the current tuition fee system remains. Life could be very hard for a young graduate attempting to pay back the cost of their education if the existing cap on tuition fees is raised.

For me, a graduate tax is the fairest way of recognising the enormous advantage enjoyed by University leavers. This view is shared by a number of campaign organisations, such as the NUS. I hope that the Liberal voice in the coalition is able to prevail over objections from Conservative backbenchers and ensure that those who gain more, pay more.