The 2020 Tax Commission – a joint project between the TaxPayers’ Alliance and the Institute of Directors – has also called for the abolition of eight separate taxes entirely.
Allister Heath, chairman of the 2020 Tax Commission, says: “It is time for Britain to make a vital choice between tweaking the status quo and letting our economy continue to be crippled by complex and punitive taxes, and drastically changing course with a radical but realistic plan for a tax system fit for the 21st Century.
“The 2020 Tax Commission has set out that plan and would ensure that income is taxed once at a single, much more reasonable, rate.
He adds: “It could create the conditions to establish the UK as a global trading hub, generating renewed prosperity for all those who live and work here. Politicians who are serious about Britain’s future need to take it up.”
Other proposals included in its report recommend limiting taxes to 33% of national income, raising personal allowances to £10,000 and abolishing taxes on transaction, wealth, inheritance, capital and labour income.
If implemented, the proposals could see fuel duty cut by 5p a litre and the abolition of air passenger duty.
The report claims the proposals would result in tax cuts for all households: a two-earner household, with an income of around £28,000 would receive a tax cut of around £3,400.
The Centre for Economic and Business Research claim the proposals would increase GDP by 8.4% over 15 years.