Skip to content

Recent Posts

  • Taxgirl Goes To The Movies: Star Wars
  • Looking For Tax Breaks?
  • Taxgirl Goes Back To The Movies In 2025
  • Here’s What You Need To Know About Submitting Tax Questions
  • Looking For More Great Tax Content?

Most Used Categories

  • individual (1,314)
  • politics (862)
  • IRS news/announcements (753)
  • tax policy (582)
  • ask the taxgirl (543)
  • prosecutions, felonies and misdemeanors (479)
  • just for fun (478)
  • state & local (403)
  • pop culture (399)
  • charitable organizations (389)
Skip to content

Taxgirl

Because paying taxes is painful… but reading about them shouldn’t be.

  • About Taxgirl
  • Info
    • My Disclaimer
    • A Word (or More) About Your Privacy
    • Subscribe
  • Ask The Taxgirl
  • Comments
  • Taxgirl Podcast
    • Podcast Season 1
    • Podcast Season 2
    • Podcast Season 3
  • Contact
  • Home
  • 2010
  • August
  • 10
  • Should A “Graduate Tax” Be Tied To Earnings?

Should A “Graduate Tax” Be Tied To Earnings?

Kelly Phillips ErbAugust 10, 2010

When I was in college, I spent a year in the northeast of England (Hull, to be exact) on an exchange program. I had a blast. I also learned a lot about the British educational system. My peers also learned a lot about our system in the US – and were shocked to learn how much we paid for higher education. Most of them paid little to nothing for their education. That may be changing.

According to a report in the Guardian, an idea is being tossed around that would tie the cost of an education to wages. The “graduate tax” would basically allow lower wage earners to pay less for their degrees than high wage earners over a period of time.

Vince Cable, the Secretary of State for Business, said about the plan, “It surely can’t be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger.”

Changes to the fee system aren’t universally embraced with worries that tying the cost of education to wages may cause students to reconsider what they study – or where they study. One concern is that students would flee to cheaper studies and jobs abroad.

Alternatives to the plan, including simply raising fees across the board, are being considered.

It’s a pretty interesting scheme, though. As educational expenses skyrocket in the US, I wonder if we’ll consider anything similar. Would it make sense to replace a flat fee tuition with a tax on earnings?

Facebooktwitterlinkedinmail
author avatar
Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
See Full Bio
social network icon social network icon
education, educational expenses, UK

Post navigation

Previous: Sunday Mailbag: The Edition With All Of The Love
Next: Voinovich Drives Home Gas Tax Increase

Related Posts

Empty auditorium

Everything You Need To Know About Student Loan Repayment And Student Loan Debt

December 1, 2020January 5, 2022 John Luckenbaugh

Congressional Proposal Would Provide COVID Tax Breaks For Employees & Parents

September 17, 2020December 14, 2020 Kelly Phillips Erb
college student tossing hats

Student Loan Relief Provisions Extended Through End Of 2020

August 9, 2020January 26, 2021 Kelly Phillips Erb

3 thoughts on “Should A “Graduate Tax” Be Tied To Earnings?”

  1. Jill says:
    August 10, 2010 at 11:11 am

    A fee vs. a tax isn’t the angle we should be looking at. Too many employers have been brainwashed into believing that a degree trumps everything. Employers see a degree as being more relevant than work experience or actual skills. A degree means knowledge, true. But knowledge isn’t the same as life experience or actual ability. I’ve worked in education the last two years and in politics for the previous 8. I beat out other applicants because I had a degree and they didn’t. My degree is not in poli-sci or education. It’s in…accounting. Somehow my degree in accounting makes me qualified for fields I’ve had no training or experience in. Point is, perhaps tuition wouldn’t cost so much if workers weren’t given so much pressure to produce that piece of paper for employers who mistakenly believe a degree trumps all.

    Reply
  2. Ken says:
    August 10, 2010 at 1:23 pm

    In your example you make a comparison between a degree for education and a degree for being a lawyer. Their are plenty of lawyers that make less than some teachers and they paid a lot more for their education. Value of a degree and skill sets change, for example I have a friend who had an enviromental degree but wasn’t making a lot of money so he became a pilot. Now the pilot job isn’t paying that well and their are alot of opportunities in the enviromental area. Tax based on degrees would be almost impossible to regulate since the value of degrees change with politicals and the economic demands.

    Reply
  3. Ryan says:
    August 10, 2010 at 7:19 pm

    I don’t understand the argument. If you wanted to redistribute, in general the best way would just be an income tax & some sort of minimum income payment or EITC. To argue for this particular policy, it seems like you’d have to say there’s some reason we should transfer relatively more to those who went to college but for whatever reason aren’t paid very well, and relatively less to those who didn’t go to college at all. Why would that be?

    (I suppose the argument could be that the returns to education are too high, or there’s too much education … but in either case, a more straightforward, and more budget-friendly, policy would just be to cut net education subsidies in general.)

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

© 2005-2022, Kelly Phillips Erb | Theme: BlockWP by Candid Themes.
Skip to content
Open toolbar Accessibility Tools

Accessibility Tools

  • Increase TextIncrease Text
  • Decrease TextDecrease Text
  • GrayscaleGrayscale
  • High ContrastHigh Contrast
  • Negative ContrastNegative Contrast
  • Light BackgroundLight Background
  • Links UnderlineLinks Underline
  • Readable FontReadable Font
  • Reset Reset
  • SitemapSitemap
  • FeedbackFeedback