Ms Reeves could feasibly raise “high single-digit billions” from an overhaul of the capital gains tax system, including bringing the headline rates in line with income tax rates, Ms Miller said.
However, she added that if Ms Reeves increased the rates, she must also reform the tax to make it less distortionary.
Ms Miller said the relief held back economic growth because it encouraged people to hoard businesses and property until they died. She said: “It is a massive incentive not to sell.”
Mr Advani added: “That capital is not supporting growth in the economy.”
Scrapping the relief will become even more important if the Chancellor is planning to raise capital gains tax rates, Ms Miller said, because higher rates will create an even bigger incentive to hold on to assets until death.
Scrapping the relief would bring in an extra £2bn for the Treasury per year by the end of this parliament, according to the IFS, but this number would be even bigger if Ms Reeves increases the headline rates.
The relief also incentivises people to pass on businesses as inheritance to their children, rather than considering a sale, which is also bad for the economy, Mr Advani said.
If a person holds on to their business until they die, not only will their capital gains be wiped for tax purposes, but their inheritor will also benefit from business relief on inheritance tax, which is worth up to 100pc on business assets, such as shares in an unlisted company.
Mr Advani said: “The empirical evidence is that kids tend to run businesses worse than their parents did. So it is actually better off being passed on from a growth perspective.”
A Treasury spokesman said: “Following the spending audit, the Chancellor has been clear that difficult decisions lie ahead on spending, welfare and tax to fix the foundations of our economy and address the £22bn hole the Government has inherited.
“Decisions on how to do that will be taken at the Budget in the round.”