The IPPR has released its proposal as John Healey, the Chancellor, seeks to raise funds for his Budget on Oct 28.
The report is likely to carry influence in Westminster owing to the close ties between the think tank and Mr Burnham’s political allies.
Its alumni include James Purnell, Mr Burnham’s chief of staff, Miatta Fahnbulleh, the Energy Secretary, and a slew of advisers and more junior ministers.
Since coming to power, the Prime Minister has revealed plans to spend more on devolution, housing and social care.
However, this has been complicated by the economic fallout from the Iran war, as higher oil prices have driven up inflation and reduced the Government’s breathing space to balance the books.
Mr Burnham refused to rule out tax rises when asked on Monday, acknowledging that “we are in a challenging position”. The Prime Minister also promised that new policies “will be funded”.
However, the prospect of more public spending comes with government finances already under strain from greater defence spending, net zero and an ageing population.
The IPPR said these three factors alone will cost the taxpayer an extra £100bn a year by 2035.
The think tank’s proposals to prop up the economy include applying the 2pc National Insurance surcharge on taxpaying pensioners.
Applying this to all pensioners with annual earnings above the income tax threshold of £12,750 would raise in the region of £2bn for the Exchequer, Prof Ansell said.
It would also hit 9.6 million pensioners.
He said this would go some way to reversing some of the damage caused by tax rises on young workers.
