The Institute of Public Policy Research Commission on Economic Justice is calling for a change to the way wealth is taxed.

It has suggested capital gains should be taxed at the same rate as income, and this would see tax rates on gains from share price rises hiked from 18% to 45% for higher rate taxpayers.

In its latest report, the Institute has suggested changes to capital gains tax could mean investors pay another £120bn in tax over five years. It also recommends taxing all income at the same rate – currently savings and dividends are taxed differently from earned income. The report said this wouldn’t change the total tax received, but the richest 20% would pay a larger share.

Hargreaves Lansdown personal finance analyst Sarah Coles said: “The IPPR wants the government to ramp up the tax on savers and investors – both on the gains they make and any income they receive.

“It underlines how tax allowances and rates can change overnight, and the important of wrapping as much of your savings and investments in ISA wrappers as possible – to help protect from money your tax, regardless of any policy change.

“The think tank says its proposals are fairer than the current system. It underplays the fact that in reality, the vast majority of savers and investors pay tax on their income from work, they save and invest diligently for their future, and may pay a second round of tax on their investment income or gains. At the moment, these are just think-tank proposals, so there’s no guarantee anything will happen on the back of them. Investors don’t need to panic just yet.”

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