Jeremy Hunt has suggested National Insurance payments could be scrapped entirely in the future, describing the levy as "particularly unfair".
Currently, people pay two forms of tax on their income - National Insurance and Income Tax - something the Chancellor said "penalises work instead of encouraging it".
Delivering the Spring Budget, he said his "long term ambition" is to end the system of double taxation, today announcing a further 2p cut to National Insurance.
He slashed it from 10 per cent to eight per cent. Self-employed national insurance will be cut from 8 per cent to 6 per cent.
Jeremy Hunt has suggested National Insurance payments could be scrapped entirely in the future, describing the levy as "particularly unfair"
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The latest changes will save £450 for the average employee, or £350 for the self-employed.
Hunt said the Treasury was able to introduce the changes "because of the progress we have made in bringing down inflation, because of the additional investment that is flowing into the economy, because we have a plan for better and more efficient public services and because we have asked those with the broadest shoulders to pay a bit more."
Speaking about the current tax system, the Chancellor said: "The way we tax people’s income is particularly unfair.
"If you get your income from having a job, you pay two types of tax – National Insurance contributions and income tax - if you get it from other sources you pay only one.
"This double taxation of work is unfair. The result is a complicated system that penalises work instead of encouraging it."
The Chancellor added: "Because Conservatives believe that making work pay is of the most fundamental importance, because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness.
"When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high quality public services, we will continue to cut National Insurance as we have done today so we truly make work pay."
Starmer accused Jeremy Hunt of "smiling as the ship goes down", dubbing him and Rishi Sunak "the chuckle brothers of decline"
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The Chancellor said the Treasury was able to introduce the 2p cut to National Insurance "because of the progress we have made in bringing down inflation, because of the additional investment that is flowing into the economy, because we have a plan for better and more efficient public services and because we have asked those with the broadest shoulders to pay a bit more."
Speaking in the Commons today, Hunt told MPs that inflation will drop to just two per cent in a matter of months.
Pointing to the Office for Budget Responsibility's report, Hunt said: "When the Prime Minister and I came to office, inflation was 11 per cent.
"The latest figures show it is now 4 per cent more than meeting our pledge to halve it last year and today's forecasts from the OBR show it falling below the 2 per cent target in just a few months time, nearly a whole year earlier than forecast in the autumn statement."
The Chancellor said the Government is now in a position to deliver “permanent tax cuts”, and billed his financial statement as a “Budget for long-term growth”.
Hunt said: “Because of the progress we’ve made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost-of-living support, but with permanent cuts in taxation.”
He claimed Conservatives know “lower tax means higher growth. And higher growth means more opportunity, more prosperity and more funding for our precious public services”.
Reacting to his budget, Starmer accused the Tories of giving with one hand but taking “even more with the other", saying today's Spring Budget was the final act of a “party that has failed”.
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The Labour leader told the Commons: “Britain in recession, the national credit card maxed out, and despite the measures today, the highest tax burden for 70 years.
“The first parliament since records began to see living standards fall, confirmed by this Budget today.
“That is their record. It is still their record. Give with one hand and take even more with the other and nothing they do between now and the election will change that.”
Starmer accused Jeremy Hunt of "smiling as the ship goes down", dubbing him and Rishi Sunak "the chuckle brothers of decline".
He accused the Conservative Party of "torching..any notion that they can serve the country not themselves", claiming they "lost control of the economy".