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George Osborne is considering cutting the 50p top rate of income tax in next week's Budget, the BBC understands.
Prime Minister David Cameron will discuss the Budget with the chancellor and other senior ministers on Friday.
There is speculation the tax on earnings over �150,000 could be reduced to a 45p rate or scrapped entirely in return for tax cuts for low earners.
Labour leader Ed Miliband said it was the "wrong priority" and money should be spent on jobs for young people.
The coalition's "quad" of top ministers, Conservatives Mr Cameron and Mr Osborne and Lib Dems Nick Clegg and Danny Alexander are discussing the Budget by telephone on Friday. Temporary tax
All budget decisions will have been made by the end of Friday so that the details can be sent to the Office for Budget Responsibility.
The government-appointed body will use these tax and spending decisions to make its economic forecasts. Continue reading the main story �Start Quote
For a chancellor sometimes likened to a submarine - George Osborne has never been timid about deploying a torpedo�
image of Ben Wright Ben Wright Political correspondent, BBC News
Is Osborne planning a 50p tax surprise?
The 50% income tax rate was introduced by the previous Labour government in 2010, to help pay for declining government revenues during the recession.
Mr Osborne has always said it was a temporary measure and has asked officials to assess how much extra it is raising.
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