Reviews
We will be bringing you regular views and reviews in this section and will be giving you the chance to subsribe to our monthly journal. In this weeks reviews, we intend to focus on taxation, for no other reason than living in the UK has to mean living in in one of the most taxed country. Over the past few weeks we have heard of a number of different taxation policies. As a student you may not think that it will really affect you, but if you do think this way then you are being oblivious to the realities of our times.
Graduate Tax For Students: Rocky Times Ahead if Cable Gets His Way.
Some of you already know Vince Cable, for those of you who do not. then we suggest that you acquaint yourself with him. He is one of the Liberal Democratic Parties' most influential figure and has recently been promoted to the position of Business Secretary in the new coalition government. he is also the MP for Twickenham, that lush side of London, famous for the Twickenham Stadium, which is popularly regarded as the 'Home of Rugby' and which has staged a number of events, including heart throbbing pop concerts. We remember going down to Twickenham a few years ago to see the Rolling Stones... now that was a great experience. But, the experience that is not so great, if it is implemented in the future; is the governments suggestion that it is considering a graduate tax.
Yes, for those of you who haven't been following this news, you did hear us correctly, if not we will say that again... A Graduate Tax. We are concerned about this proposal as student's already have a hefty weight to carry in terms of the rising number of student debts, with some students already facing over £20-50,000 worth of debts after they graduate. The idea of a graduate tax is quite interesting. Vince Cable is suggesting that university students should not pay tuition fees, but should pay a separate taxation to fund the cost of their university education. We think that this suggestion, like many others from the present and previous government has not been thought out very well. You would have thought that with so many bright minds in the current coalition government, whose members are mainly graduates from some of the UK's top universities, that by now they would have at least came up with a practical idea of how to pay for the cost of students tuition fee.
The problem is this, if they ask all students to pay up-front using their own money, then some students simply will not be able to afford the cost, which is currently set at £3,225 for students in England, Wales and Northern Ireland. At present, university students in Scotland do not have to pay tuition fees. However, there are suggestions that the Scotts will soon be reintroducing tuition fees for students. If this is done, then we will no doubt have another uproar about this. For the rest of us, in other areas of the UK, paying tuition fees is the norm and most students have been funding the cost of tuition fees by acquiring loans, from banks, building societies and most popularly from the Students' Loans Company, which means that the government provides a loan to assist you to pay for your tuition fees. Some of you may not consider this a bad thing as you do not have to worry about repaying your loan until after you have completed your course and start earning over a certain threshold. The problem with this set-up is that the Students' Loans Company is notorious for having problems and this year we saw where they experienced severe delays in processing their students' loans, which meant that many students could not start their course because their tuition fees were not paid. If you were one of the many students caught up in this unfortunate dilema, then our thoughts reach out to you.
As for the current proposals to introduce a graduate tax on students, there are several holes in this idea. Firstly, how would such a tax work, would it be placed on all graduates or just some, what would be the interest rate, would it be linked to inflation and most importantly how long would they be taxing students for? The answers to these question is needed in order to further scrutinize the prospects of this graduate tax. Students may well be put off going to university just to avoid being taxed by the government. If the graduate tax is set so that graduates continue to pay this tax for the rest of their life then this would definitely mean that they would be paying even more than what thei actual cost of their course! This in itself would be an unfortunate situation for the UK and would perhaps affect the reputation of UK's higher education at home and abroad.
Our hats goes off to international students studying in the UK as they already pay thousands of pounds for their tuition fees. They bear the full cost of paying their fees, which may be anything between £8-12,000 per year and in some cases even more. Of course some international students are sponsored by their country so their sponsors, would pay the full cost of these fees but for others who are not sponsored and not rich, they really do what it takes in order to cough up the money to pay their fees. The argument then is this, if overseas students can do it, then what about UK students? The answer is varied, but we are not comparing like-with-like, the reality on the ground is that some UK students may well be able to cough up all these thousands of pounds if they were asked to, but others who are already struggling to cope financially, would indeed find it even harder. This situation would also result in further inequalities in society, with higher education (universities) being seen as only a place that the rich can afford. Therefore, whatever decision the coalition government takes, it needs to ensure that it is not making university the preserve of the well offs in our society.
We should also ask another question here, why does the UK have such a major obsession with taxation? So many are put off by this. Several companies have closed down and relocated to more tax-friendly parts of the world as they say that the UK has far too much taxation and regulation, even professional sports men and women are finding that living in the UK is somewhat of a rip off. Think about it, where does Lewis Hamilton live? Certainly not in the UK and why? Because he is running away from the tax man. What about the story over the weekend, where the fastest man on earth, Usein Bolt, refused to run a race in the UK because; and these were his exact words..." if I run in the UK the government will end up getting more money for the race (through its taxation system) than I will get for racing and it makes no sense to run in a country where the government is making more money from the race than I am". We say, good on you Usein, at least he has a choice, but for the vast majority of us, we have no other choice than to live in the UK, which we know is a great country, but could be even better if the government did not find the need to constantly tax its people. Tax and waste, seems to be the order of the day, since some of our money is being squandered on rubbish, while we the ordinary people suffer. Take for instance, Tameside Council in Greater Manchester who have spent £36,000 building... wait for it.... a virtual town hall for a video game on its website that they had to scrap since enough visitors were not using the site! Madness? Yes indeed, especially when we find out that they have now scrapped this project, but that was £36,000 of our hard earned money gone down the drain and there are endless examples of this sort of waste. We have also been following the recent news that over 100 civil servants in the UK are earning more than the Prime Minister! For you and us, that is more than £150,000 per annum. Where does it all end?
If the government are looking for savings and if universities are really looking for funding, then we would suggest that they start to take a closer look at themselves rather than at the pockets of ordinary students. This said, we still need to find a long-term solution to University Funding, but we simply believe that taxing graduates is definitely not the solution.
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