Vince Cable today announced plans to clobber the wealthiest homeowners as part of a massive Liberal Democrat tax-raid on the rich.
In a direct bid to attract traditional Labour supporters to the Liberal Democrats, the economic affairs spokesman promised to prioritise income tax cuts for low and middle-earners.
That would be funded by a £17bn package of tax hikes elsewhere, including a new levy on the estimated 250,000 houses worth more than £1m.
Other moves would include a crackdown on top earners, including City traders, who pay capital gains tax on their earnings at 18% rather than the 40 per cent top rate of income tax.
Pensions tax relief for higher earners would also be scrapped and the capital gains tax exemption cut from £10,000 to £2,000.
The highly-redistributive tax reforms - including taking four million low-earners out of income tax altogether - come as the Lib Dems seek to supplant Labour as the party of the left.
But Mr Cable also warned that he would have to take decisions on public spending that would not be easy or popular and refused to rule out the prospect of overall tax rises at some stage.
Following Lib Dem leader Nick Clegg's warnings of the need for "savage" spending cuts, Mr Cable said he wanted to curb pensions in the public sector and freeze its overall salary bill.
He also promised to end tax credits for the higher-paid and to take an axe to dozens of quangos.
But he insisted that the Lib Dems were "fundamentally different from" the Conservatives.
"The Tories' top priority is to cut taxes on millionaires," he told delegates in his keynote speech to the Lib Dems' annual conference in Bournemouth.
"Our top priority is fairer taxes for those on lower and middle incomes."
Mr Cable sought to portray his proposed property tax as hitting the likes of steel magnate Lakshmi Mittal and Russian billionaire Roman Abramovich, the owner of Chelsea Football Club.
He said the super-rich had been investing in mansions rather than job-creating businesses.
"Remember too that under our unfair council tax Messrs Mittal and Abramovich in their £30m palaces pay the same as a band H family home, though their properties may be worth 40 or 50 times as much," he said.
Under the plans, there would be a new 0.5 per cent annual levy on the value of homes above £1m.
The move represents a significant about-turn by the Lib Dems after years of criticising property taxes as regressive.
Aides said it was only intended as a temporary move before their planned implementation of a new local income tax.
They also acknowledged that a disproportionately high number of the estimated 250,000 affected homeowners would be in London and the South-East.
But they said that usual council tax exemptions would be available to pensioners, for example, whose properties have crept above the million-pound threshold as house prices have soared over the past decade.
Other Lib Dem tax-raising measures would include higher green levies on air travel, including a per plane fee replacing the existing passenger duty to discourage empty flights.
Former Lib Dem president Simon Hughes today suggested that Mr Clegg would be unable to persuade the party to drop the commitment to scrapping university tuition fees from its manifesto for the general election.
Mr Clegg yesterday said he was personally committed to the principle of free tuition, but feared that the £12.5 billion bill could not be afforded during the course of the next Parliament.
Mr Hughes told BBC Radio 4's World at One: "We did look at this formally only six months ago and rejected a change.
"Personally, I don't think it is likely to change again. That is my judgment, knowing the way the party will work. There are other ways we can find savings, other places we can cut back on expenditure.
"These things are always negotiations between leaders and the party's democratic process. The party has to agree its manifesto between the policy committee and the MPs, so there will be that discussion and negotiation.
"It is honest to say this is expensive, we may not be able to afford it. But we haven't made a final decision and my judgment is we will want to keep the policy as it is."