Finance Minister Brian Cowen today lashed out at the Opposition's promise of a 2 per cent cut in the standard rate of tax, claiming Irish people would not accept it.
Hitting back at a keynote address delivered by Labour leader Pat Rabbitte, Mr Cowen said the speech was as an incredible Road to Damascus conversion.
He also said Labour's new position had more to do with poll ratings than tax rates. Last night, Mr Rabbitte vowed to cut the standard tax rate from 20 per cent to 18 per cent if the party is voted into government.
He said the Government's reduction of the top rate had only lined the pockets of the well-off, and accused it of wasting more taxes than any administration since the foundation of the state.
"Mr Rabbitte's speech last night is an admission of years of error in his core tax policies and an admission that he has lost the argument on taxation," said Mr Cowen.
"Lower taxes have brought higher employment, greater take home pay for workers and stronger revenues for the State to invest in improved, public services." Mr Cowen said the Government's record in relation to income tax matters is unparalleled.
"Since 1997, we have cut tax rates, widened tax bans, introduced tax credits and created a national minimum wage," he continued. "This has meant that two out of five workers are outside of the tax net altogether and 80 per cent of all income earners now pay tax at effective rates of 20 per cent or less.
"These tax policies have helped create 600,000 jobs in the last 10 years. All of these tax changes were opposed by Labour in opposition.
"It is simply not credible that Mr Rabbitte and the Labour party will now implement a policy approach in Government that they have opposed so strongly for the past 10 years."