Mr Clegg said growth forecasts would stoke up false hopes
Alistair Darling's moves to tax higher earners more will only affect a "tiny minority" and raise very little money, says Lib Dem leader Nick Clegg.
He said the failure to stop high earners declaring income as capital gains meant a "massive subsidy for the very rich" remained in place.
And the chancellor's growth forecasts suggested he was living in a "fantasy world", he said.
He said it was not likely that many of the policies would ever be implemented.
Responding to the Budget statement Mr Clegg said the "worst of times demands the best of budgets" and referred to memorable budgets of the past.
Instead the government had been "desperately rushing around picking up half-baked ideas to save the skin of this failing government", he said.
"Patchwork repairs" were not enough, Britain needed to do things "fundamentally differently", particularly by making big changes to the banking sector.
High street banks should not be taking "unnecessary risks" with people's money while "risky casino investment banking" should be "cut loose to fail", he said.
While Mr Darling had addressed the issue of higher tax relief on pension incomes for the wealthy, he had only "tinkered" with the loophole, removing it from the "tiny minority" earning more than £150,000 a year.
The 18% capital gains tax, which the Lib Dems say high earners use to avoid the top rate of income tax, remains a "massive subsidy for the very rich", Mr Clegg said.
"The biggest disappointment of all in this Budget is its failure to sort out Britain's unfair tax system, to put money into people's pockets to help them make it through this recession," Mr Clegg told MPs.
"Taxes are still too heavy on those who can least afford it and too easy to avoid for those who know how. That's how this government and the Tories seem to want it."
He said the chancellor's predictions that the UK economy will grow 1.25% next year then 3.5% the year after that "stoke up false hopes".
"Given the lamentable failure of this government to get its own predictions right people will be asking what kind of fantasy world the Labour Party lives in," he said.