Clegg Wants A Tycoon Tax For Those Avoiding The Inland Revenue

Clegg Wants A Tycoon Tax For The Super Rich

Nick Clegg said he wants to go after millionaires who dodge levies on their wealth by introducing a "tycoon tax".

The Deputy Prime Minister claims many top earners are avoiding taxes by employing an "army of lawyers and accountants".

In an interview with The Telegraph as the Liberal Democrats meet in Gateshead for their spring conference, Mr Clegg said he believes thousands of millionaires pay tax at a rate of less than 30%.

It comes after prospective US Republican presidential candidate Mitt Romney admitted he was paying just 13.9% tax on his earnings.

Mr Clegg told the newspaper: "You hope that kind of thing doesn't go on in this country. So I looked into it. There are hundreds of people earning millions per year who are barely paying 20% tax, forget 40%, forget 50%, forget 30%. They are not even paying 20%. Therefore, I think it's time that we look at what I call a tycoon tax.

"If you're earning millions per year, if you're able to pay an army of lawyers and accountants to basically pick and choose what tax you are paying, if you are paying as low as 25, 20% or even less in tax, there should be a minimum fair share that you should pay to society.

"It makes people so incredibly angry when you are getting up early in the morning, working really hard to try and do the right thing for your family and for your community, you are paying your taxes and then you see people literally in a different galaxy who are paying extraordinarily low rates of tax."

According to The Telegraph the level could be set between 20 and 30%.

Aides said no minimum rate had been laid out but the "problem" was being discussed ahead of the budget.

Mr Clegg added: "I think the principle of a mansion tax is a perfectly sensible one.

"The overall approach to bearing down on avoidance, closing loopholes, making sure the wealthy pay more of their fair share than less - that is what is more important to me at the end of the day."

The Lib Dem leader has put pressure on Chancellor George Osborne to accelerate the rate at which the income tax threshold is raised to £10,000 as the part of his drive to ensure the wealthy pay more.

But a report by the respected economic thinktank the Institute for Fiscal Studies (IFS) said better-off families will benefit most from a rise in income tax allowances, questioning claims the policy was progressive.

It said the second-richest tenth of families would gain most in cash terms - and that the top half would do best as a proportion of income.

The IFS concluded that the policy was the most effective way of focusing tax cuts on the lowest pay and would boost incentives to work by taking some out of income tax altogether.

But it said: "It is important not to claim too much for a policy which, especially in the current fiscal climate, is expensive.

"The common assertion that increasing the personal allowance is progressive is true if one considers the gains across individual income taxpayers.

"It is not true if one considers the gains across all families as relatively few of the poorest families contain a taxpayer and two-earner couples gain twice as much in cash terms as one-earner families."

Chief Secretary to the Secretary Danny Alexander said he was close to agreeing Budget proposals with Mr Osborne to go "further and faster" to removing low earners from tax.

The Liberal Democrat hinted that raising the tax threshold to £10,000 within the next two years could be paid for by removing pension contributions on the highest paid earners and closing tax loopholes exploited by millionaires.

"I'm proud of the progress that we've already made. We want to go further and faster on that in this year's Budget."

Liberal Democrat deputy leader Simon Hughes told BBC Radio 4's Today programme that, in contrast to the Tories, his party was arguing for tax cuts for the poor.

"We were going to always have a difficult time in the middle of the parliament, because we were going to have to take difficult decisions," he said.

"But there is an overriding priority which is to give a better deal to the poor and the low paid and make sure those with the broadest shoulders pay for it.

"You will see that again in the Budget this year."

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