I have been asked what a retrospective tax would cost. Here’s my very guestimated answer.
It would depend, partly, on what it was meant to cover but let’s assume for the moment it was to replace £3bn worth of cuts to HE. At the moment there are approximately 8.6m income tax-paying graduates in the UK workforce, or about a third. So the cost to them, on average, would be about £350 a year in additional income tax, or £6.72 a week, or less than a 2-2.5p increase in the basic rate of income tax for graduates.
It is a price I’d certainly be happy to pay, and as most of those being asked to pay it will have (a) benefitted from the system in the past and (b) in the majority of cases will have children and even grand-children who would benefit from it now, I suspect this is one tax increase that might find unexpected support.
And of course a retrospective Graduate Tax has one big advantage over every alternative – the administrative costs would be negligible because it would simply form part of the tax coding system.
Before anyone starts yelling, yes I know those figures include Scotland and there’s lots of other details to work out. But this at least give some idea of just how easy and how un-painful a retrospective graduate tax would be.