A Graduate Tax? That's Taxing Success!

2016-07-29 06:31

I was shattered to see that the proposal to levy a special tax on university graduates was being raised, yet again!

It's no doubt come about because our universities are currently experiencing extreme financial hardship, primarily because Government recently saw fit to assure students that there would be no increase in university fees in 2016!

Government's appeasement of the students' demands was clearly a "knee-jerk" reaction to a crisis and it appears that little thought was given to how the financial shortfall was going to be funded - it was, very simply, political expediency at work!

I've given the matter some thought and I believe that the introduction of a “graduate tax” would be counter-productive, and unfair, and I say this for the following reasons:

1) It’s a “tax on success” ie if you graduate, you must pay more tax than if you don't graduate, all other things being equal! What about those students who don’t graduate? They’ve certainly wasted taxpayers’ money, since they will also not be providing the nation with the much-needed expertise of skilled graduates - and yet they will never bear any cost of that wastage!

Rewarding those who fail and effectively penalising those who pass – how utterly bizarre!!

A nation needs graduates (doctors, engineers etc) to provide the skills to grow its economy! Without those skills, the country becomes a very unattractive investment destination, and that means fewer jobs and more poverty for (mainly) the "non-graduates"!

2) It will likely increase the number of graduates who leave SA for overseas where they will have better opportunities and will not have to contend with racial and/or tax discrimination! Our government still doesn't appear to appreciate that people are very mobile these days and will seek out places where their skills are appreciated and properly rewarded. The so-called "brain-drain" doesn't appear to be of great concern to our leaders - I suppose that's not surprising since a graduate and an uneducated/unemployed person (and even a convict!) each have one vote!

3) It’s a “double-tax”, and that's simply unfair! If one assumes that graduates generally earn at high income levels, they automatically fall into the higher tax-paying brackets – why then introduce another tax on those who are already paying tax at the top marginal tax rate?

I find it sadly amusing that the business/corporate world, often encourages its employees to study by providing them with study loans, usually on the basis that the employee must repay the loan if he/she fails, but that the loan will be written off if he/she graduates ie it’s based on the principle of rewarding success!

A “graduate tax” will do just the opposite - it will penalise success! Clearly someone’s got it wrong – and who that is, should be obvious to all!

I believe that SA finds itself in this predicament of insufficient funds for heavily-subsidised/free university education because:

- It’s simply starting to run out of money (there are too many “have-not’s” and too few “have’s”) - this has been a rather predictable situation, given how B-BBEE has been implemented and the fact that our education system has failed miserably - but these "stumbling blocks" have conveniently been ignored - again, a case of political expediency!

- Taxpayers’ funds are being wasted by a bloated civil service and widespread corruption within that service - the country's small number of taxpayers surely can't sustain this very expensive "monster" for too much longer!

- There’re simply too many people entering the system ie too many babies are being born! Too many university entrants means too much cost! Perhaps control of this (proper family planning/sex education) is the key to most of the problems that we are experiencing in SA!

- There are still race-based quotas for university entrants ie entrance isn’t simply based on academic achievement/results. Admittance to universities that isn't based on proven achievement has to add massively to the cost structures of such universities eg having students repeating academic years, too many entrants etc. Our government doesn't appear to be that concerned about getting the "biggest bang for their buck" when it comes to education - they seem to see university (race-based) quotas etc as trumping this!

SA needs to “wake-up” very smartly and start rewarding success and achievement – failure to do so will see us slip into the all-too-easy comfort of mediocrity and become yet another one of the continent's many failed states!

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