Labour leader Pat Rabbitte has refused to commit the party to the indexation of tax bands if it forms part of the next government.
Indexing tax bands to the rate of inflation ensures workers on lower pay are not dragged into a higher tax bracket when wages rise.
Addressing a breakfast meeting of the Association of Chartered Certified Accountants in Dublin yesterday, Mr Rabbitte said that if elected to government, Labour would not necessarily keep income tax bands in line with inflation.
"The only commitment I have given is that within two years of being in government we will reduce the income tax rate from 20 per cent to 18 per cent.
"Obviously it is desirable that there should be indexation, but no prudent government will say at this distance what would be the precise make-up of the budget," Mr Rabbitte said.
The commitment to cut the standard rate of income tax from 20 to 18 per cent was one of five key policy commitments unveiled at a special Labour Party conference last week.
Labour has strongly criticised budgets of the present Government for failing to update income tax thresholds - allowing income earners to drift above the standard rate tax band as their earnings grow.
Mr Rabbitte also accused the Government yesterday of pursuing a reckless and inflationary approach to managing the economy and promised that if elected to government, Labour would respect EU budgetary guidelines.
He committed Labour to sticking to the provisions of the stability pact if elected to government.
The pact, which aims to underpin budgetary stability in EU states, particularly euro zone participants, forbids governments to run budget deficits in excess of 3 per cent of Gross Domestic Product.
Mr Rabbitte said Labour's key election commitments - including more health spending and assistance for house buyers - could be funded by economic growth over the life of the next government.
"If the economy were to grow on average by 4½ per cent a year that would yield in excess of €11 billion in today's money. It will generate resources undreamt of by previous policy-makers."
He said Labour was now committed to a policy of low taxation and if in government Labour would not raise the rate of capital gains tax. "No, I don't intend increasing it. I have to say I would not have cut it as dramatically as Charlie McCreevy did at the time. Maybe I was wrong."
Rejecting accusations that he was engaging in "auction politics", Mr Rabbitte said Labour had been more responsible when in government than the present Government.
"When Ruairí Quinn left office, inflation was at 1.5 per cent and the public finances were brought into surplus for the first time in 20 years . . . I'm very pleased about the role that my party played in the 1994 to 1997 period", he said.