May 19, 2020

Oregon Proposes Novel Investment Approach to Student Tuition

Robert Spence
student debt
Student Tuition
Oregon
Bizclik Editor
2 min
Oregon Proposes Novel Investment Approach to Student Tuition

The July edition of The Business Review USA is now live!

By: Robert Spence

College is supposed to be one of the best times of your life, and typically it is. It’s after college when you start paying back student loans that it becomes a real nightmare. According to a Fidelity survey of 750 college graduates, the average college debt is about $35,000 per student. In just the last 30 years, tuition for college has increased a mind-boggling 1,210 percent.

The state of Oregon has proposed a radical investment approach to loans, offering free tuition at public universities in exchange for three percent of earnings for the first 25 years after graduation. The “Pay it Forward, Pay it Back” plan would essentially allow students to enroll with no money down, so long as they agree to pay up to three percent of their future salaries back into a state fund annually. Additionally, no payments would be collected from graduates unless they are gainfully employed, which means they’d be off the hook while in graduate school or out of work.

“If it’s done correctly it’s essentially creating a social insurance vehicle for enabling access to higher education,” said John Burbank, executive director of the Economic Opportunity Institute, the Washington state-based think tank that helped come up with the idea.

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However, critics of higher education, especially venture capitalist Peter Thiel, have long argued that college simply isn’t worth the price tag:

“Probably the only candidate left for a bubble – at least in the developed world (maybe emerging markets are a bubble) – is education. It’s basically extremely overpriced. People are not getting their money’s worth, objectively, when you do the math.

Students are clearly driving the push for tuition reform across the country, as the nation grapples with its $1 trillion debt load. State funding for schools has been slashed left and right as more and more students turn to student loans to fill the gap.

Surprisingly, Oregon’s proposal isn’t entirely a new idea. According to the New York Times, Nobel Prize-winning economist Milton Friedman came up with the idea back in 1955. Yale University piloted it for their first own students before the introduction of federal loans.

So far, Oregon is the only state to really make moves to put such a plan in place. Lawmakers unanimously approved a committee to develop a pilot program for Pay it Forward, Pay it Back, but it would be at least until 2015 before they decide to move ahead or not. 

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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