There can surely be no more depressing news, no greater harbinger of doom for the lamentable direction that the UK is travelling in than the leaking of Osborne’s intention to reduce the top rate of tax from 50% to 40% in next week’s budget.

Cited as the reason for this 10% tax cut for the super-rich is a need to show that Britain is open for business, and the cut will come backed by a very useful (not to mention suspiciously timely) study showing that the top rate of tax brings in hundreds of millions rather than billions of pounds.

George Osborne and David Cameron’s focus should be on increasing that hundreds of millions figure, not reducing it down to zero.

And goodness knows where this leaves the Lib Dem hope of bringing many of the lowest paid out of tax altogether. Tax cuts at both ends of the earnings spectrum when we’re skating perilously close to a double dip recession seems foolhardy at best. Incidentally, the SNP position was laid clear on BBC Question Time last night when the supreme Humza Yousaf made clear that one of his primary desires for the budget is to see the 50% rate remain in place.

Alas, it shall be going, and all because George Osborne is wilfully drawing the wrong conclusions around the low level of tax that it supposedly brings in.

To use Goldman Sachs’ favourite word, only a ‘muppet’ pays PAYE these days, only the grunts that do the legwork. Meanwhile the banking superstars rake in the mega-salaries and mega-bonuses. I got paid my first ever bonus this week, a banker’s bonus no less (the shame). I have no qualms about saying that it was ‘only’ £4,700, 10% of salary, but when 1,200 jobs were cut on the same day, it was more than enough to make me feel decidedly queasy.

Some people might be surprised and/or startled by the inclusion of salary information in the above paragraph, but that for me is part of the same problem with this tax cut and the widespread tax avoidance that goes on. Back in the days when I was contracting for various financial services companies, the recruitment agents would ask with lascivious grin whether I wanted to be paid PAYE along standard tax rate lines or through an umbrella company, avoiding National Insurance contributions and paying a much lower level of tax than I would do under PAYE. I always went for PAYE. Every other person I’ve spoken to in a similar position went with the other option, and many of them have gross annual pay that is a heck of a lot more than I enjoy. That’s where a tax take that should be billions becomes hundreds of millions right there.

George Osborne could, at a stroke, eliminate this tax avoidance and bring in a fortune to pay down the deficit and reverse the level of cuts that he has made over the past couple of years and intends to make going forwards. The practice of avoiding tax in this manner is so naked that it is an easy target, the lowest of low hanging fruit for any Chancellor faced with the unenviable task of making Britain’s books balance. Indeed, the practice is so endemic that even Moira Stuart, hitherto the embodiment of all that is good and right in the world, and the public face of the Inland Revenue, uses a private firm to reduce her tax payments. If that’s not the final straw then what is?

Let’s face it, ‘we’re all in this together’ is precisely what many of us thought it would be, a handy election slogan pitched at just the right level to get the Tories over the line in May 2010, after which it could quickly be discarded.

The truth is we probably need to go even further than the Tories even dare consider going. Don’t we as society deserve to know that all citizens are paying their fair share of tax, from Rooney to royalty? A simple system that would surely guarantee maximum tax intake each financial year is to put every taxpayer’s gross income and tax contributions online for all to see. This is sacrilege to many fiercely private Brits but it already works in Sweden, Norway and Finland and sunlight is the best disinfectant. Would Ken Livingstone have set up a company to avoid tax in such situations? Would idolised footballers? Would Moira frickin’ Stuart?

With this tax cut, and the conscious decision to not go after the super wealthy, George Osborne is aiding and abetting a new divide in the UK. It’s not North vs South and it’s not Working vs Middle vs Upper, it is those who PAYE vs those who do not PAYE. The former are the mice, honestly turning the wheel of the British economy and the latter see themselves as the men, living a life of luxury largely removed from the rest of us.

The Tories sold us a dream, of fairness, of a big society, of rising standards. We knew it would never happen, but it was nice to pretend that it might do, for a short while.

I only hope that the Lib Dems, the only hope that we have left, will do the decent thing and get out of this partnership before George takes the short story of this parliamentary term to too frightful an ending.