The Ukip leader announced the proposal as part of a raft of policies for the party's manifesto, including capping GPs' pay at £100,000 a year. The manifesto is due to be unveiled at Ukip's annual conference in September.
His plan to raise the pay of MPs is likely to prove controversial among the public, but Farage said: "If we had a sovereign parliament that actually ran this country and was directly responsible for the rules and regulations that controlled our industries, that determined whether we succeeded or failed in the world, I would have no problem in paying MPs more."
He suggested MPs' pay could be £90,000 to £100,000.
Farage also said GPs should have their pay capped."They got the most massive pay increase under [Tony] Blair and those that have turned their local surgeries effectively into their own private fiefdom and businesses, are taking too much money out of this system."
Speaking on LBC radio he also proposed that the NHS funding gap could be narrowed by cutting back on the number of middle managers.
The Ukip leader also indicated he would like to see more money spent on defence. He revealed that he would like to retain the Trident nuclear deterrent but reduce the number of submarines at sea from four to three.
Amid claims that Ukip will have no credible means of cutting the deficit, Farage argued the government could save up to £50bn by cancelling the HS2 rail link and save a further £55m a day by withdrawing the country from the EU.
He also promised to cut the government aid programme, saying: "I would suggest that most of the money we spend on foreign aid actually is spent on propping up foreign regimes and doesn't do humanitarian work."
The figures used by Farage give some indication that Ukip would try to balance the books while cutting taxes.
Farage confirmed his party was likely to call for the abolition of inheritance tax, which he said would cost the Treasury £2bn a year.
"The thing about inheritance tax is … that the very rich don't pay it, because they have advance tax planning, offshore trusts and all the rest of it. Inheritance tax hits people, you know.
"You're 35 years old, mum and dad are killed in a car crash. Its pretty blooming traumatic and then you find that the three-bed semi in Clapham, that you grew up in, thinking you were quite ordinary, modest people is actually worth £1.2m. And you have to sell that because you can't afford to pay the inheritance tax on their death duties."
Faced by Labour claims that senior figures in Ukip backs NHS privatisation, Farage said: "We are absolutely committed to the principle of healthcare being free at the point of delivery but we want to get a better bang for our buck because what have we got, for double health spending, over the course of the last 15 years, we've got heart, stroke and cancer rates that are lower, in terms of performance, than other European countries who are spending less than we are."
He also disclosed that once outside the EU, Ukip's immigration policy would only allow the under-45s with skills not available in the UK to migrate to the country and bar anyone from settling if they have a life-threatening disease or a criminal record. He said his plans were based on the ideas of the Australian points-based system and sent out a clear integrationist message.
Farage criticised the government for completely outlawing smoking in all private spaces "when actually I think my local pub should be able to provide a smoking room at the back".
The Conservative party chairman, Grant Shapps, said: "It's staggering that having raked in millions from Brussels – and now getting ready to run for parliament – Nigel Farage is demanding that MPs get paid £100,000 a year.
"While we have taken difficult decisions to safeguard the economy for the long term, people who have made sacrifices over the last few years will be furious at this outrageous proposal."
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