Labour has proposed a temporary VAT reduction as the best way to stimulate recovery but Mr Balls said he would "applaud" any any type of tax cut.
"Something must be done now...you need some fiscal action," he said. "If George Osborne announced a temporary cut in the basic rate we would applaud him because we would say, 'At last he is finally doing something to get some spending power back into the economy'."
Hopes the economy could grow in this quarter and thus avoid returning to recession were dealt a blow this week by a 1.5% fall in manufacturing output in January. Former cabinet minister Liam Fox is leading Tory calls for a change of course - calling for Corporation Tax to be reduced to zero and more cuts to public spending.
A successful Budget - after last year's embarrassing U-turns - is seen one key to calming restive Tory MPs amid poor poll ratings and the Eastleigh by-election failure.
Other prominent backbench demands include cancelling a fuel duty rise due in the autumn and scrapping the beer duty escalator that automatically ups the price of a pint.