Chancellor George Osborne and shadow chancellor Ed Balls have set out their competing messages ahead of the Budget on BBC One's Andrew Marr Show.
Mr Osborne said the coalition's welfare reforms were "one of the most progressive things that any government has ever done".
He also revealed that the Help to Buy scheme for newly built homes would be extended to 2020.
But Mr Balls accused him of failing to stem the UK's "cost of living crisis".
The chancellor said: "I'm a low tax Conservative. I want hard-working people on all incomes to keep more of their income tax free."
'Perverse incentives'His priority had been to increase the personal allowance on which no income tax is paid, he said.
This had taken the lowest paid two million workers out of tax altogether - but also helped those on higher incomes, he added.
End Quote Ed Balls Shadow chancellorThere was nothing that could have been done pre-crisis to raise taxes or to cut spending which would have made any difference"
Mr Osborne also said he had frozen fuel duty "year after year" and had "helped to keep council tax frozen".
He continued: "We had a welfare system that not only we couldn't afford but also we had these very perverse incentives that made it better for some people to stay out of work than be in work.
"We're changing all of that, and the reforms that Iain Duncan Smith and myself have brought in are one of the most progressive things that any government has ever done."
The chancellor also said the government's Help to Buy scheme had "helped people into homes, and... helped build new homes".
"I want to extend the help to buy scheme for newly built houses - it was going to end in 2016; we are now going to extend it for the rest of the decade," he said.
"That will mean 120,000 new homes."
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George Osborne said the government's initial plan was to build 15,000 new homes in Ebbsfleet
He also announced plans to build a new garden city in Ebbsfleet.
Bank levyBut Mr Balls said the chancellor was "only ever tough when he is having a go at the weak and the voiceless".
By contrast, he argued, Labour would "take away the winter allowance from the richest pensioners", "re-introduce the 50p tax rate on incomes over £150,000" and impose a "mansion tax" on properties worth more than £2m.
A future Labour government would also use a bank levy "to pay for more childcare for working parents", bring back the 10p income tax rate, and abolish the "unfair and perverse marriage tax break, which George Osborne has given only to a third of married couples".
"These things are all paid for. I am not making any spending commitments which we can't say how we'll pay for them," he told the Andrew Marr Show.
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Labour's proposed spending is all "paid for and costed", says shadow chancellor Ed Balls, and highest earners will pay more tax
The shadow chancellor also defended the previous Labour government's record in office on public spending.
"There was a global financial crisis," he said.
"At that point, we had the lowest level of national debt of any big country and George Osborne, the Conservative shadow chancellor, had matched Labour's level of public spending.
"Am I going to apologise for the level of public spending that George Osborne, Alistair Darling and Gordon Brown agreed on in 2007? Absolutely not.
"What we did on the NHS was hugely important, the national minimum wage, not joining the euro.
"The economics of this is that we had a very low deficit [and] low national debt before the crisis. What happened was a collapse in tax revenues because of the crisis.
"There was nothing that could have been done pre-crisis to raise taxes or to cut spending which would have made any difference."
The two MPs also took to the Sunday tabloids to set out their policies.
Writing in the Sun on Sunday, Mr Osborne pledged to build what he called a "resilient economy".
But Mr Balls, in the Sunday Mirror, said millions of people were not feeling any benefit from economic recovery.
In Wednesday's Budget, the chancellor is expected to say the recovery is under way.
But he will also warn that the job is "very far from done", and announce more details of his plan for a cap on parts of the welfare budget.
Meanwhile, Liberal Democrat Chief Secretary to the Treasury Danny Alexander has hailed rises in the personal tax allowance - and said this was more important than changing the 40p tax threshold.
Writing in the Mail on Sunday, he said: "I made it clear at our spring conference last week that further rises would be a top priority for our party in any negotiations that might be required should the British people deliver a hung parliament.
"We aspire to raise it substantially to £12,500."
He also said the Lib Dems were committed to sticking to the plan to eradicate the deficit and get the nation's finances on a firm footing by 2018-19.
"That means that there is a period of further deficit reduction required after the next General Election."
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