GATESHEAD, England – British deputy prime minister Nick Clegg on Saturday proposed a UK equivalent of the "Buffett Rule" in a bid to clamp down on tax avoidance by millionaires.
Clegg, the leader of the Liberal Democrats, the junior partner in Britain's coalition government, told The (London) Daily Telegraph that many top earners were avoiding tax by employing "an army of lawyers and accountants."
His comments, made before he was due to address the party's spring conference in Gateshead, northeastern England, came amid an ongoing backlash in cash-strapped Britain over bankers' bonuses and calls from businesses and some Conservative lawmakers to scrap the 50 percent top rate on income tax, which they say is a money loser.
Clegg said thousands of British millionaires were in fact paying less that 30 percent tax on their income, and he was prepared to remove his party's opposition to lowering the top rate if a "Tycoon Tax" was introduced.
He said a minimum rate should be written into law to force the richest to pay "their fair share."
Clegg said the inspiration for the "Tycoon Tax" compromise was none other than Mitt Romney, after the Republican presidential hopeful disclosed he was paying just 13.9 percent tax on his multi-million-dollar earnings.
"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 per cent tax, forget 40 per cent, forget 50 per cent, forget 30 per cent. They are not even paying 20 per cent," Clegg said. "Therefore, I think it's time that we look at what I call a tycoon tax."
Clegg said the British public was angry at the perceived lack of fairness.
"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 per cent or even less in tax, there should be a minimum fair share that you should pay to society," he said.
Clegg did not put a figure on what the minimum rate should be, but the newspaper said the level was likely to be between 20 to 30 percent.
This would be roughly on a par with US President Barack Obama's proposed "Buffett Rule," which would require those making $1 million a year or more to pay at least 30 percent of their income in federal tax.
The "Buffett Rule" is named for Warren Buffett, the Omaha investor who argues that very high-income people are paying too little in taxes.