![]() ![]() Scrap them for next year’s intake and millennials would still be saddled with their old debts, plus the burning resentment of knowing they’d paid more than either previous or future students as a result of being caught up in what would be branded a failed experiment. Arguing about whether Keir Starmer should or shouldn’t have ditched Labour’s promise to scrap tuition fees, meanwhile, now looks way behind the curve. The struggle, as the saying goes, is real: the longing for tax cuts is totally understandable. That’s on top of everything else millennials struggle with – such as expensive childcare and soaring rents and the gloomy prospect of never being able to buy a house, plus the same painful food and fuel inflation everyone is experiencing – and means that, even before housing costs, a 30-year-old earning a theoretically good salary just doesn’t have the spending power of previous generations on equivalent wages. Treat it as the tax it has effectively become, and, by the end of last year, young graduates were facing a marginal rate of 41% for basic-rate taxpayers or 51% for higher-rate ones. (From this August, the repayment threshold drops to £25,000, while the repayment period stretches to 40 years, but with interest charged at RPI.) Graduates from English universities currently begin repaying student loans once they’re earning more than £27,295 a year, with 9% of anything over that threshold deducted from pay packets either for 30 years or until they’ve paid everything off – which for many would be never, given that their debt is growing with a punchy interest rate of RPI (currently 11.4%) plus 3%. ![]() But years of tweaking later, it doesn’t half feel like one. When Tony Blair first introduced tuition fees in 1998, he made it very clear that the system wasn’t intended as a graduate tax. Or more accurately, they’re paying what feels like an extra tax. If millennial pips are squeaking, that’s because, compared with previous generations at the same age – or older people now – many of them really do pay higher marginal tax rates. Something is going on under the bonnet here that neither Labour nor the Tories are properly addressing, and it’s about who genuinely gets a raw deal from the tax system. Yet Onward finds it is also more hostile than average to the idea of government redistributing income (as opposed to people keeping more of their own money) and it prioritises taxes over the social justice it is often thought to be devoted to. Unusually, this generation isn’t getting more rightwing as it ages, with only 21% willing to vote Tory at the next election. The battle lines on tax have been so firmly drawn for so long that this week’s report by the centre-right thinktank Onward on the political instincts of millennials – the late-20s-to-early-40s demographic poised to overtake baby boomers as the biggest electoral grouping – landed initially as something of a shock. ![]() Meanwhile, even the embarrassment of being sacked over his own complex tax affairs seemingly hasn’t deterred the multimillionaire Tory MP Nadhim Zahawi from solemnly campaigning this week to scrap inheritance tax, on the grounds that taxing the unearned income of rich people’s children is supposedly a “ spectre that haunts” us all. ![]()
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