Copying the mistakes of Greece
Bridget Phillipson's education tax sets out to follow the ignoble example of Greece's Marxists and their "general mayhem"
A quick plea for your help, then some rare evidence that supports everything I’m saying about VAT on schools.
Please help
I’m into this issue for the relatively unimportant reason that it hurts me. But aside from me and mine, I care about (in no particular order): the trashing of (on the most optimistic estimates) several tens of thousands of children’s education; the losses to the public finances, to which Mrs Chips and I are hefty contributors; the trampling on a minority because, according to Bridget Phillipson, this is a policy supported by the majority (how un-British and illiberal); the expansion of the state monopolist so that our children’s children have even fewer choices than are available today; the truth.
So if you’re inclined to agree, I would love the following support. Please do:
Sign Tony Perry’s petition; encourage children and extended family to do the same
Point people towards this blog: it’s free and I’m doing it for love.
Engage politely in the debate with your friends, neighbours and colleagues who use state schools: there are some great talking points on the Education Not Taxation website.
Write to your MP and to candidates from all parties; again there’s some ideas for such letters on Education Not Taxation
Get in touch below if you’re willing to help more…there’s only four of us and we could do with any assistance.
Surely it’s good to “learn from others’ mistakes”? Labour don’t seem to think so
If a sign of insanity is, according to disputed sources, “doing the same thing repeatedly in the expectation of different results”, then in the imperfect laboratory of economics, it’s refusing to look at natural experiments. We seldom know what will be the effect of this tax or that subsidy until we try…and the cost of trying can sometimes be large.
So before we bet the farm on some Really Good Idea with uncertain outcomes (there are always uncertain outcomes), it’s considered normal to ask “has this been tried anywhere before”?
Fortunately, as regards taxing education, we have this excellent Economist article to go on: Greece reconsiders a tax on private education. A few quotes probably suffice, subscribers will get my drift by now:
The left-wing government aimed a new tax at the rich. It hit the poor instead.
It looked like a double win that would simultaneously please creditors and demonstrate the government’s commitment to helping the underprivileged. Unsurprisingly, it did neither.
Some of the country’s reasonably priced private schools were forced to close, leaving staff jobless. Elsewhere, fees rose.
Those whose parents were unable to pay higher fees moved into the already overwhelmed state system
In the new climate, “lay-offs are inevitable, but so is tax avoidance,”
The general mayhem caused by the tax is forcing the government to reconsider.
Snog, marry, avoid? I mean, as economic policies go, this one turned out to be an absolute pig - and “unsurprisingly” so. More seriously, virtually no countries in the world have ever taxed education. As every A-level economist has been taught, ever, it’s a positive externality and Arthur Pigou told us to subsidise, not to tax a positive externality, especially where there’s a state-obligated supplier in the background.
It’s not often economists agree with a proposition as strongly as “don’t tax a positive externality”; as a result it’s not often we get to see the results.
Greece was in desperate circumstances and elected a bunch of openly-declared Marxists. Marxists do silly things - but at least that gang had the excuse that they were trying something new. Maybe the economic theory, which had never really been challenged, would turn out to be wrong?
The British Labour Party says it’s not a bunch of Marxists and won’t do silly things; for example they’re ruling out a wealth tax, and hinting at a low-tax agenda, and Wes Streeting has even said some half-sensible things about the NHS. So why would they want to try again on taxing education, now that the jury is (following the Greek experiment) very much “in”? Why would they be cool with economists warning of exactly what happened in Greece?
Pupil migration that will cost the state money, rather than raising it;
School closures;
Arrivals into an over-stretched state sector that isn’t equipped to cope;
Avoidance and enforcement challenges;
….before we even explore the impact on the externality itself, namely the ability of the private sector to develop human capital?
It seems here that Greece no longer applies VAT to education. They stuffed things up, briefly, for a few years’ worth of guinea pigs children. Must Bridget Phillipson repeat the socialist experiment to see if it turns out better for our guinea pigs children?