Since the coalition government came to power, it has repeatedly argued that it has no choice but to impose the biggest cuts in public services since 1945. The Trades Union Congress's anti-cuts march on 26 March was the most visible demonstration yet that hundreds of thousands of workers and students disagree. It was right for Ed Miliband to address the marchers, despite the attempts by some to link him to the violence that took place elsewhere. It was also right for him to deliver the unpopular message that "some cuts" need to be made. Even after the coalition's initial austerity measures, the deficit for this year is expected to be £145.9bn.

The Labour Party's commitment to a lower level of cuts than what the coalition is pushing forward is premised on the belief that it can raise significantly more from taxation. Mr Miliband has said that, were Labour in power, it would reduce the deficit through a 60:40 split between spending cuts and tax rises, as opposed to the coalition's 73:27 split. He is understandably reluctant to commit himself to a specific programme of tax rises at this stage but, as he oversees a major policy review, he should note the important debate taking place within the coalition.

Following Chancellor George Osborne's announcement that he hopes to abolish the 50p tax band in the near future, Vince Cable has raised the possibility of replacing the top rate with a range of property-based taxes. As he wrote in his recent essay for the New Statesman on reclaiming John Maynard Keynes, Mr Cable believes in shifting taxation away from "profitable, productive investment" and towards "unproductive asset accumulation". He has promised to push for the introduction of a "mansion tax", as proposed by the Liberal Democrats at the last election, under which a levy of 1 per cent would be imposed on houses worth more than £2m.

There are strong, principled and pragmatic arguments for higher taxes on property. These automatically apply to largely untaxed foreign owners, target the source of much unearned wealth and are harder to avoid than taxes on income. In addition, they reduce the distorting effect that property speculation has on the economy.

The failure of successive governments to tax property at a fair rate is one reason why the top 10 per cent of households own more wealth than all others combined. The concentration of wealth is most grotesque in the case of land, 69 per cent of which is owned by just 0.3 per cent of the population. As we have long argued, a land value tax, at least for business and agricultural land, would provide a new source of income, as well as encouraging divestment and the dispersal of land. Such a programme of reform would enable significant cuts in personal taxation. As the possible merger of income tax and National Insurance has highlighted, the basic marginal rate of tax is, in effect, 32 per cent. This is much too high for those on low and middle incomes.

The old tax-and-spend model of social democracy is failing in an age when capital is so mobile and the rich are so adept at avoiding taxation. We need a new business model for social democracy in Britain, one that shifts the burden of taxation from earned to unearned income; from taxes on income and consumption to those on property, inheritance and land.