George Osborne has warned that Nick Clegg's proposals to make the wealthy pay more tax would drive rich people out of Britain.
On Wednesday the deputy prime minister said people with "very considerable personal wealth" should make a "time limited contribution" as the country faced a "longer economic war".
But speaking on a visit to Sunderland after returning from his summer holiday, the chancellor insisted he had already taken steps to ensure the UK's highest earners pay more.
"I am clear that the wealthy should pay more which is why in the recent budget I increased the tax on very expensive property transactions," he said.
"But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."
Clegg revealed his plans in an interview with The Guardian, and said it was only fair that the rich paid more in tax.
"If we are going to ask people for more sacrifices over a longer period of time, a longer period of belt tightening as a country, then we just have to make sure that people see it is being done as fairly and as progressively as possible," he said.
The Lib Dem leader's proposals come ahead of the party's annual conference in Brighton, with senior Tory backbencher Bernard Jenkin dismissing the proposal as "pre-conference easy clap line" that would not see the light of day.
And Labour MPs lined up to accuse Clegg of hypocrisy given the coalition's decision to cut the top rate of tax from 50p to 45p at the last Budget.
Shadow business secretary Chucka Umunna said on Twitter: "Clegg thinks by calling for a Mansion tax,people will forget he gave a tax cut of over £40K to many thousands of millionaires. Well we won't."
While Chris Bryant said: "Nick Clegg has a cheek calling for higher taxes for the wealthy: he voted to cut the 50p tax rate."