Nick Clegg is demanding a "tax the rich" Budget in March to head off growing fears that the Coalition will lose public support because its deficit-reduction programme is seen as unfair on ordinary families.
The Liberal Democrats are urging George Osborne to include a mansion tax on homes worth £2m and measures to stop the rich avoiding stamp duty when they sell their properties by transferring ownership to shell companies.
Although it is thought the Chancellor is unlikely to introduce a high-value property tax immediately, he may set up a review to look at raising the tax burden on the rich by targeting property assets rather than income, which would be harder to avoid. Mr Osborne is likely to act on stamp duty, amid evidence that rich people reduce the 5 per cent stamp duty on the sale of homes worth £1m to only 0.5 per cent by placing their property in a company.
Mr Clegg and other Liberal Democrat Cabinet ministers will make their demands in behind-the-scenes talks with Mr Osborne ahead of his Budget on 21 March. Other Liberal Democrat proposals include a tax on land values and scrapping the 40 per cent tax relief on pension contributions for higher rate taxpayers.
They also want a new crackdown on "non-domiciles" – foreign residents living in Britain who do not pay tax on their overseas earnings – by ordering them to pay full tax on them after seven years in this country.
Today Mr Clegg will join the debate over "responsible capitalism" ahead of a speech on "moral markets" by David Cameron later this week. The Deputy Prime Minister will call for millions of workers to own shares in their companies in a new "John Lewis economy". Ed Davey, the Liberal Democrat business minister, will review whether employees could be given a new "right to request" shares in the companies they work for.
Liberal Democrats are worried that public support for spending cuts could melt unless the rich shoulder more of the burden of tackling the deficit.Reuse content