George Osborne should scrap the 50p top rate of income tax "at the earliest opportunity" to boost growth, a group of leading economists have said.
In a letter to The Financial Times, 20 high-profile business experts told the Chancellor the UK needs to return to an "internationally competitive tax regime" to stimulate the stuttering economy.
The signatories added the tax levy, which was introduced by the previous Labour government and applies to high earners on an income of over £150,000, "punishes" entrepreneurship.
"We are concerned that Britain's 50p income tax rate is doing lasting damage to the UK economy," wrote the economists, who include Cambridge University academic Bob Rowthorn and former members of the Bank of England's Monetary Policy Committee DeAnne Julius and Sushil Wadhwani.
"It gives the UK one of the highest personal tax regimes in the industrialised world, making it less competitive internationally and making us less attractive as a destination for both foreign investment and talented workers."
The economists, who said the rate applies to just 1% of people who pay 24% of all income taxes, added: "We call on the Government to drop the 50p tax at the earliest opportunity as part of a package of measures to stimulate growth."
Mr Osborne has already indicated that he believes the rate should be scrapped if it is not raising significant revenue.
TUC general secretary Brendan Barber said: "At a time when cuts are biting hard and ordinary people are suffering the biggest squeeze on their living standards in years, the last thing we need is a handout to the wealthiest in our society. "
Shadow Chancellor Ed Balls said: "Millions of struggling families and pensioners on middle and low incomes will wonder why the only tax rise or spending cut George Osborne is willing to reconsider is the top rate of tax for the very richest.
"If we really are all in this together then the right priority to boost the stalled economy now should be temporarily reversing the VAT rise, which is costing families with children around £450 a year. This temporary tax cut would help to kick-start the recovery and give a much needed boost to millions of people regardless of their income."
