Did George Osborne benefit from cutting top taxes, Labour demands. His careful response will not hold the line, for him or any politician. The London mayoral race may lack dignity or vision, but it changed politics by forcing publication of tax returns: whatever Ken Livingstone claims, few people think paying tax a distraction.

Something deep and visceral has shifted, ending the notion that income is a confessional secret between taxman and individual. The taboo is broken and must lead to universal transparency. Stripping off the veil of financial modesty would be a shock at first, but we would get used to earnings and taxes belonging in the public realm, not the private one – wills are already public documents. What is there to hide, except dishonesty or moral shame at earning multiples more than others who work as hard or harder?

The tax genie is out and nothing Osborne publishes will be enough – he needs to say what's in his wife's name, what wealth he has in trusts, and so on. Point the finger at frontbench multi-millionaires and questions will multiply: are they cutting top tax for personal gain? Frankly, that's unlikely. They are so rich that the self-inflicted political damage of this tax cut far outweighs any personal gain. But the scratchy politics of grudge in such a dysfunctionally unequal country forces the question – over half the population earns five or 10 times less than the chancellor. Extreme inequality makes politics nastier.

It's a bullying game, but there will be no stopping it. An opponent only has to publish a tax return to force an incumbent to follow suit. After Livingstone's inexplicable failure to make his tax affairs irreproachable, a shudder of panic must ripple through elected politicians. After the expenses revelation, next comes strict tax fairness. What of the upper public servants – shouldn't we know what tax they pay, lest it influence their decision-making too?

This feels like a witch-hunt, hounding those in the public realm. Maybe it serves Tory ministers right if the virulent anti-state mood fostered by the likes of Francis Maude returns to bite them in the tax return. But it doesn't serve citizens well for the public sphere to be singled out for this trashing. Voters expect scrutiny of public officials, but in this largely uncorrupt country wrong-doing revealed among them would hardly be a twitch of the needle on the Richter scale of tax dodging/aggressive avoiding and executive jet expenses in the private sector, all protected by tax secrecy. The financiers' destruction of millions of livelihoods has been deftly redirected on to employees of the state, earning a fraction of the income of FTSE chief executives. At the Barclays AGM this month, Bob Diamond's £17m comes with a bizarre deal for shareholders to pay his £5.7m tax bill too. We need to know how much "tax planning" by these panjandrums is depleting the Treasury.

Relatively small avoidances by elected or public officials risk being treated as gigantic scandals, if private millionaires and companies escape the same scrutiny when cheating Revenue of billions. HMRC treats even Goldman Sachs's tax returns as strictly confidential. Yet we should know if water company bosses paid fair tax on earnings from businesses that failed to invest in leak repairs. Do energy company heads pay fair tax on money they earn from price profiteering? As public money flows into Serco, KPMG, Circle and the like, profiting from taking over the NHS and other state functions, we should know if their chief executives pay fair tax. We should know what tax is paid on profits from our purchases at Amazon, Boots or Philip Green's Top Shop.

John Redwood protests that all avoidance is legal: after all, he says, ISAs avoid tax. Indeed, the avoidance/evasion line is wobbly – but the FT has just splashed on a disgraceful story of how the rich are already avoiding higher stamp duty. The budget imposed a 15% rate on those who put property in an offshore company, selling the company instead of the property, and attracting no stamp duty. City lawyers have devised a new loophole, with a multi-year rolling lease whose value stays just under the £2m threshold, avoiding duty. HMRC plods after them, but fly tax lawyers stay ahead.

That's another reason for total tax transparency, so that strident public opinion can help draw the ever-shifting line between what is acceptable and what looks like cheating. Cuts to HMRC staff and the weak plan for a general anti-avoidance rule make citizen scrutineers invaluable.

In Norway, Finland and Sweden, among others, everything is known about any citizen's finances at the click of a mouse. The boss of Nokia, pop stars and politicians face annual embarrassment as the press explores their returns. Transparency underpins a culture of social justice and civic duty. I have long advocated that we follow them: after the initial shock, we would soon look back on privacy as a cheat's charter.

Secrecy encourages inequality. Hidden pay scales make it hard for women or others to challenge unfair pay structures. Professor John Hills's surveys show how little people know about what others earn or where they stand compared with the median. The study of mega-earners in Unjust Rewards, a book I wrote with David Walker, proved them clueless about their extreme privilege. Without knowing the pay, tax and wealth of others, how can citizens vote on what's fair?

These are odd political times. Anger about fair tax, high salaries and class rips through everything. What used to be called the politics of envy bursts out in unexpected places. The rightwing press often seems as outraged as the left about CEO excess, in an inchoate contradiction of its broader political views. It would be hard to call this a leftwing moment, yet strong undercurrents pull hard towards fairness. Public sentiment is changing fast and Osborne was running to catch up when he castigated "aggressive avoidance" as "morally repugnant". Maude boasts of turning Britain into a tax haven: "That's exactly what we're trying to do." He'll regret it as the public turn on those who pay no tax, syphon profits elsewhere, and leave regular Paye citizens to pay for all that draws the rich to live in Britain.

Taxes are the price we pay for civilisation: soon that price must become a public declaration for all. As for Labour's challenge to Osborne, the serious charge is not that he lined his own pocket, but that he pretends to believe, against all global evidence, that when the rich get richer so does everyone else.

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