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The government has U-turned on plans to scrap the 45p rate of income tax for higher earners.
Chancellor Kwasi Kwarteng told the BBC the proposals, announced just 10 days ago, had become "a massive distraction on what was a strong package".
"We just talked to people, we listened to people, I get it," he added.
The decision, which marks a humiliating climbdown for Prime Minister Liz Truss, comes after several Tory MPs criticised the plan.
On Sunday, Ms Truss had said she was committed to the policy.
The plan to scrap the 45p rate, paid by people earning more than £150,000 a year, was announced as part of a package of tax cuts.