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 advisors 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 fiscal headroom.
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 says.
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.
A long-standing freeze to income tax thresholds is forcing millions of workers to pay income tax, while also pushing others into higher tax brackets.
The IPPR said the policy, known as fiscal drag, was leading to people over the state pension age paying a lower rate of tax than a young worker on the same income, especially once student loan repayments are taken into account.
“For the past decades, the chief beneficiaries of British fiscal policymaking have been older, wealthier citizens – typically, the retired,” said the IPPR report.
“By contrast, the hardest hit have been those in work, particularly younger people repaying student loans through the tax system.”
As well as charging pensioners National Insurance, Prof Ansell’s report also calls for greater taxes on wealth, including sharp increases in capital gains tax to align the rate with income tax.
That means higher earners would pay 40pc on their capital gains, a significant rise from the current rate of 24pc.
He also proposed scrapping council tax and stamp duty in favour of a 0.65pc annual charge on the value of homes.
This policy is designed to tax those in expensive homes more than cheaper properties, often resulting in higher bills for those in the South East compared to other parts of the UK.
Prof Ansell said winners of the change would include “anyone in Gateshead in a band D property worth less than £415,000”.
“Symmetrically, homeowners in Wandsworth would take a large hit,” he added.
