The Government is considering raising capital gains tax (CGT) to as high as 45% to help fund a £20bn increase in the income tax personal allowance to £15,570. A Budget proposal from Labour donor Dale Vince argues that wealth is currently taxed more lightly than income from work. Equalising CGT rates with income tax is estimated in the submission to raise around £14bn, with the remainder of the £20bn package potentially funded by ending interest payments on Bank of England reserves. The higher personal allowance would partly reverse the impact of the freeze in income tax thresholds and provide a tax cut for millions of lower earners. Modelling commissioned from the National Institute of Economic and Social Research suggests that raising the allowance by £3,000 would cost the Treasury £20bn and leave the lowest fifth of earners around £600 a year better off.

The Government is considering lowering the mansion tax threshold from £2m to £1.5m, potentially increasing the number of affected properties from 134,000 to 271,000. Chancellor John Healey is examining the change ahead of the Budget, although no decision has been taken. The Government has ruled out wider reforms to stamp duty and council tax previously championed by Andy Burnham because they would require extensive revaluation and take years to implement. Wandsworth, Kensington and Chelsea, Westminster and Richmond councils have urged Mr Healey to reconsider the mansion tax, warning some residents could be forced to sell their homes. Arun Advani of the Centre for the Analysis of Taxation said lower-value properties currently face proportionately higher council tax rates and suggested a lower mansion tax threshold could make property taxation more equal.

The Conservatives are urging Prime Minister Andy Burnham to rule out tax rises in the upcoming Budget, with Shadow Chancellor Andrew Griffith warning that high taxes are driving young people abroad. He also declined to confirm reports that the Conservatives could pledge to abolish inheritance tax, saying he would support such a cut only if the party could fully identify the funding. Mr Griffith added that the Conservatives would look to reduce regulatory burdens on small businesses, citing estimates that tax compliance costs small firms £25bn a year and involves an average of 44 hours annually in tax administration. Saying that the Tories will replace the IR35 tax rules for self-employed workers, he also called for officials to "pause job-destroying red tape."