Landlords should pay more tax to balance inequalities within the tax system, according to the Resolution Foundation.

The think-tank's new report points out that while the top tax rate for employees stands at 53.4% including employer NICs, only 28% is paid on property gains.

It says property capital gains (excluding main homes) and rental income should be taxed at significantly higher rates; marginal CGT rates on assets other than shares should be 40%, 49% and 53% depending on income.

Increasing tax rates on rental income and self-employment would then enable the rate of employer NICs to be cut by 1%.

The Resolution Foundation explains how Britain needs to move away from its 'simplistic and pernicious cycle of promising tax cuts while delivering tax rises, and towards reforming and improving our tax system so that it supports, rather than hinders, economic growth'�.

New class of NI

Its report highlights how rental income is taxed at regular Income Tax rates but attracts no National Insurance. Instead, landlords should pay a new class of NI with a basic rate of 20% and a rate above �50,270 of 8%.

It explains: 'Raising the overall basic marginal tax rate on rental income from 20% to 40% would clearly be a significant change for lower-income landlords and would no doubt need to be phased in, for example by 2% a year.

"But there is fundamentally no good reason why landlords should not pay NI equivalent to that paid by their working tenants, particularly given a CGT cut to take paper gains out of taxation.'�

The 2025 stamp duty rise should also be cancelled, along with halving stamp duty for main homes and non-residential properties.

Read the tax proposals in full.