Tax” and “fairness”: what a potent rhetorical combination those two words can make. Each by itself packs a wallop in political terms but put together they have become the weapon of choice in the ideological wars that now dominate electoral life on both sides of the Atlantic. Here at home, Nick Clegg’s Tycoon Tax came and went in its original punitive form, but its spirit lives on in the Philanthropy Penalty, which is designed to prevent rich people from indulging in one of their decadent pastimes – giving money away, and from which the Government is, as we report today, desperately trying to row back. Meanwhile, in the United States, Barack Obama has launched his presidential campaign with a phoney (because it will never be passed by Congress) but symbolically significant version of the original Clegg gambit.
Known as the Buffett Rule, after a suggestion by Warren Buffett that millionaires such as him should pay a higher proportion of their earnings in tax, it proposes that anyone earning more than a million dollars a year should pay at least 30 per cent of his income in federal tax. At the moment, many such people, in the US and here, pay tax at a lower rate because their earnings come from capital gains or dividends rather than wages.