REUTERS

NEWCASTLE LIBERAL Democrats proposed targeting the rich with a “tycoon tax” only days before they and their Conservative Party coalition partner present an annual budget, in a high stakes gamble to revive the party’s flatlining poll ratings.

The last-minute proposal is one of several levies on the rich the Lib Dems want included in the budget to pay for the party’s key policy of additional tax cuts for the lower paid.

The widely publicised plans look set to strain ties with the Conservatives, the senior party in the coalition, who may block or water down the moves and make the Lib Dems look ineffectual.

The Conservatives are traditionally the party of the wealthy, but are on the defensive as bankers continue to receive millions in bonuses even as state spending is cut to bolster a faltering economy.

The Lib Dems hope to harness public fury over soaring executive pay amid harsh austerity measures to pressure finance minister George Osborne, a Conservative, to take on their proposals when he presents the budget on March 21.

“The sight of the wealthiest scheming to keep their tax bill down to the bare minimum is frankly disgraceful,” Lib Dem leader and deputy prime minister Nick Clegg told party members on Sunday at the end of the Lib Dems’ annual spring conference.

“So, we will call time on the tycoon tax dodgers,” he said.

The centre-left Lib Dems have seen their popularity slump in coalition government, and have been abandoned by many supporters amid accusations of ignoring party values to share power with the Conservatives, ideological opponents on many issues.

Clegg hopes targeting tax avoidance and the wealthiest will fund a flagship budget proposal to speed up a plan to cut taxes on poorer workers, clawing back grassroots support and distinguishing the Lib Dems from the Conservatives.

“The budget in ten days time ... must offer concrete help to hard-pressed, hardworking families,” Clegg said.

A Lib Dem source close to Clegg said: “To raise the stakes like this, 10 days out from a budget in a conference speech, shows the personal attachment Clegg is putting to this fundamental front page manifesto policy.” The Lib Dems want four key levies on the rich, but the socalled tycoon tax - inspired, Clegg says, by reports U.S
presidential candidate and multi-millionaire Mitt Romney only pays 13.9 percent tax - is likely to grab the most headlines.