Tax returns

May 8, 2014

Australia invented the “income contingent contribution” concept, a much better way to see the student contribution.

When the Dearing Committee first debated the principle in 1996, the lifetime earnings advantage due to a degree was £400,000. That made free higher education a huge subsidy to the middle classes, and limited expansion. So the principle was right but the practice is wrong. It should not be a fee or a debt, but a tax – progressive, so that the more you earn the more you contribute to enable others to benefit as you did.

Some of us on the Dearing Committee urged the “graduate tax”, but ran out of time to consider it. The committee’s report recommended it for future consideration and it got it in 2004, when there were advocates in both the Department for Education and Skills and the Treasury, but Tony Blair did not want a “tax”. The financial accounting of “loans” at government level also got in the way of a rational and fair approach. And we still do not have a good and fair solution, and evidently it doesn’t even provide the necessary funding. Time to consider the “graduate tax” again?

Diana Laurillard
Via timeshighereducation.co.uk

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