The Liberal Democrats want the coalition to raise the income tax threshold above £10,500 by 2015, which could effectively mean a £100-a-year tax cut to 24 million basic rate payers.
The move, which would take half a million people out of income tax altogether, would represent a £1 billion tax giveaway before the next general election.
The Lib Dems have already seen the coalition achieve their manifesto commitment to raise the personal allowance to £10,000 - which was finally reached in the last Budget in March.
Lib Dem leader Nick Clegg will write to party activists next week calling for a "workers' bonus" to reward voters for the financial sacrifices they have made during the years of austerity.
More top news
The Queen and senior members of the monarchy will attend services around the world to commemorate the centenary of the battle of Gallipoli.
The Liberal Democrats have proposed to invest an extra £10 million in mental health care for military personnel
David Cameron hopes to set out a positive vision of Toryism for ethnic minorities predicting the UK's first black PM will be Conservative