Ten per cent of the gains from economic growth should go on tax cuts, the deputy leader of the Progressive Democrats, Liz O'Donnell, said yesterday.
Ms O'Donnell, addressing the issue of the next programme for government, said tax cuts could be targeted at low and middle-income workers, and that the top rate could be cut to 40 per cent.
She said by increasing credits and bands the party wanted to allow a couple earn up to €40,000 tax free and up to €100,000 without paying any tax at the top rate.
Ms O'Donnell, addressing a Network Ireland conference in Galway, said the Progressive Democrats were committed to doing more on tax.
"Of course the majority of the benefits of economic growth must go to essential public spending, which should rise considerably faster than inflation. But a portion can and should be reserved to radically reduce the tax burden on lower and middle-income workers."
Ms O'Donnell did not comment on the issue of stamp duty. Last month party leader Michael McDowell said reform of stamp duty on residential home sales would be part of the PD manifesto for the coming election.
On Thursday Minister for Finance Brian Cowen indicated that he had no intention of including stamp duty reform in the coming budget.
He also indicated he would favour increases in credits and tax bands over cuts in rates.
Ms O'Donnell, in her address, expressed her view that the Business Expansion Scheme and Seed Capital Scheme should be extended and limits increased.The limits should be brought in line with current prices.
She also said an exciting prospect was opening up to develop a truly dynamic all-island economy, and called for real operational North/South co-operation, "blurring the Border and barriers which have divided our people for too long".
Speaking to the theme Defining Success: How Do We Know When We've Made It?, Ms O'Donnell said: "Despite the whinging and chastisement from certain commentators that we were happier and nicer people when poor, and that we have somehow lost our civilised values, I reject that proposition.
"Sure, we display signs of new money madness - paddocks without horses, bathrooms bigger than gardens, and oil-guzzling SUVs and helicopters. But as a people we have not lost our soul," she said.
