In a much-anticipated speech in Bedford on Thursday morning, the Labour leader said his plan would be funded by a mansion tax on houses worth over £2m.
He said: "Let me tell you about one crucial choice we would make, which is different from this government.
"We would put right a mistake made by Gordon Brown and the last Labour government."
Despite being introduced by then-chancellor, Brown, in 1999, he then abolished the 10p tax rate it to much outcry eight years later.
As well as trying distancing himself from the sins of the previous Labour government, Miliband is keen for his 'One Nation' Labour Party to be seen as supporting hard-working people on lower incomes.
This is in contrast to a Conservative-led government that, according to the polls, is seen as favouring the wealthy with policies such as the controversial cut to the 50p top rate of tax and a reluctance to implement a tax on higher priced properties.
On Wednesday, at PMQs, David Cameron mocked the Labour leader for planning to give a speech without any policies in it.
Miliband declared: “Moving Labour on from the past and putting Labour where it should always have been, on the side of working people.
“Britain is at a fork in the road. We can carry on as we are: falling wages, low growth, failure to tackle the deficit.
“Or Britain can take the path I have outlined: a recovery made by the many, tackling low growth and reducing the deficit, building not squeezing the middle, all of us playing our part in turning this economy around.”
Balls claimed it could raise over £1.7bn and he would be happy to start talks with the Treasury on Monday and work on plans with chief secretary, Danny Alexander.
Speaking to the BBC Balls said: "This is a very clear statement. It's what we want to do now and it's what we want to do in 2015."
Questions have been raised however in the wake of the speech as to the viability of funding the required cut through a mansion tax alone.
Cameron rubbished the proposals on a visit to Eastleigh on Thursday.
He said: "My prediction is that they won't have thought it through or costed it properly and we will discover over the course of the day all sorts of problems and issues with a policy that looks like it has been cobbled together overnight," reports Sky News.
Treasury sources told the BBC the plans lacked "economic credibility".
The government will have a chance to respond when chancellor George Osborne announces the Budget on March 20th.
The Institute for Fiscal Studies (IFS) was also sceptical of the two new tax proposals.
It suggested better alternatives would be to reform council tax and raise the threshold at which low earners pay National Insurance Contributions.
This would be "slightly more progressive, take some people out of income tax altogether and avoid the complexity involved in introducing a new income tax rate".
Also in his speech Miliband stressed it was up to individuals to play their part in a successful British economy and to increase their own living standards.
He said: "When you play your part, when you make your contribution to the economy, you will be rewarded.
"And that Britain’s economic success will be built by the many, not just by a few at the top."
The Labour leader also highlighted the importance of skills training for young people who don't go to university and outlined a new vocational qualification.
He said: "We must end the culture which says University is always best and vocational education is second-best.
"It simply isn’t true.
"That’s why One Nation Labour will create a new technical baccalaureate, to complement A-levels."
Other Labour proposals covered in the speech are to:
- Break the stranglehold of the big six energy suppliers.
- Stop the train company price rip-offs on the most popular routes.
- Introduce new rules to stop unfair bank charges.
- And cap interest on payday loans.
Miliband contrasted today's economic climate to that of 1957 when Conservative prime minister Harold Macmillan gave a speech just across the river celebrating a booming British economy, in a speech that became known as the “you’ve never had it so good” speech.
He said: "It’s what Harold MacMillan understood when he spoke here in Bedford more than half a century ago.
"We can rebuild this country, we can offer people hope.
"We can make an economy that works for working people.
"It’s a goal worth fighting for.
"It’s what One Nation Labour will do."
Ed Miliband's speech text network visualised