Liberal Democrats at war over Nick Clegg's plan for a 'tycoon tax' Nick Clegg wants to back off a 'mansion tax' and push instead for a US-style 'tycoon tax' on the rich. The Liberal Democrats descended into open warfare over tax on Saturday as senior party figures reacted furiously to a call by Nick Clegg to back off their flagship plan for a "mansion tax" and push instead for a US-style "tycoon tax" on the rich. Clegg angered key figures close to the Lib Dem business secretary, Vince Cable, when he said the idea of a legally binding minimum rate of tax for "tycoons" was "far more important" than taxing homes worth over £2m. In a speech to the Lib Dems' spring conference in Gateshead, Cable stoked the row by making clear that he was still in favour of the mansion tax rather than the new Clegg plan, on which he is said not to have been consulted by the party leader. He told the conference: "We must insist on a radical plan for fair tax which we developed in opposition through the tax commission: lifting low earners out of tax and shifting the tax base from income to wealth, especially high-priced property." The row is a severe embarrassment to the Lib Dems, who had hoped to use the conference to present a united front on tax ahead of the 21 March budget. The Lib Dems want chancellor George Osborne to raise the tax-free threshold - initially to about £9,000, and then to £10,000-plus before the next election. Today, in a speech to his party, Clegg is expected to say that "the budget in 10 days' time must offer concrete help to hard-pressed, hard-working families" through a "big increase in the income tax threshold further and faster towards £10,000." Lib Dems say the move could be paid for by higher taxes on the most wealthy, with Cable pressing for a tax on homes worth more than £2m. But Clegg shifted his ground yesterday when he announced his "tycoon tax" idea in an interview with the Daily Telegraph. He said hundreds of millionaires were paying a tax rate of less than 20% on their earnings by employing an "army of lawyers and accountants." The answer, he suggested, would be to enforce a legally binding minimum rate of tax - probably between 20% and 30%. But Lord Oakeshott, a former Lib Dem Treasury spokesman who is seen as Cable's mouthpiece, accused Clegg of floating an unworkable idea and of bypassing his party's established policy-making structures. "This is a superficially attractive idea that falls apart on close analysis," Oakeshott said. It does nothing to catch non-doms or non-residents. The US system is quite different from ours. We worked for years to produce a fair and robust tax policy. You can't invent Lib Dem policy on the hoof. In the past 10 days the Lib Dems have indicated they would be prepared to accept a cut in the 50p top rate of income tax - a key demand of many Tory MPs - in return for a wealth tax. Chris Leslie MP, Labour's shadow financial secretary, said few people would take Clegg's calls for fairness on tax seriously while the coalition was hitting the poor with cuts to tax credits. He is negotiating how to cut the 50p top rate of tax for the richest 1% while slashing tax credits by £73 per week for working couples on the minimum wage. And he is the man who campaigned against a regressive rise in VAT, but then announced a VAT hike just weeks after becoming deputy prime minister," Leslie said.