The Chancellor signalled his intention to axe the 50p top rate of tax before the next election.
A review will examine if the bracket for those earning £150,000 or more is actually raising any money.
George Osborne warned that the 50p rate would ‘do lasting damage to our economy were it to become permanent’ because it would ‘undermine aspiration’.
The tax was brought in by Labour Chancellor Alistair Darling, who claimed it was a temporary measure.
But Mr Osborne has kept the rate in order to demonstrate to those on lower incomes that the best off are also making a contribution to eliminating the structural deficit.
Setting up a review by HM Revenue and Customs will give the Tories political cover to remove the 50p rate if it is not proving to be a moneyspinner.
The Adam Smith Institute has warned of a fall in tax receipts of £350bn over ten years as the wealthy take avoidance measures.
Mr Osborne told MPs: ‘When businesses and capital and people can increasingly move anywhere, high tax rates can do real damage.
‘They crush enterprise, undermine aspiration and often undermine tax revenues.’
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