FINE Gael is to propose a £1.5 billion programme of tax reductions over five years as a central part of its election programme.
The party's plan involves major changes to the tax and PRSI system. Similar proposals are expected to be produced next week by the other two Coalition partners.
Details of Fine Gael's proposals have not yet been released, but The Irish Times understands that the party proposes to introduce over five years:-
. A 50 per cent increase in tax-free allowances from £2,900 to around £4,350, to remove a significant proportion of income from the tax net entirely;
. An increase of over a quarter in the standard 26 per cent income tax band to ensure that less income is taxed at the higher rate;
. A reduction in the rate of employees' PRSI from 4.5 per cent to 3 per cent;
. An increase in the income limits for the 2.25 per cent health and employment levies, which would mean that only people earning over £17,000 paid them, compared with £10,250 now;
. A reduction in the top income tax rate from 48 per cent to 45 per cent, although this is believed to be lower in the party's priorities than the other measures.
Fine Gael will argue that these proposals will offer the greatest benefit to the 750,000 workers who earn £15,000 or less and the 250,000 who earn between £15,000 and £30,000, while also offering significant gains to higher earners.
Fine Gael's proposals are in line with a commitment in the "21 Goals for the 21st Century" programme presented yesterday by the Taoiseach, Mr Bruton, along with the leaders of Labour and Democratic Left, Mr Spring and Mr De Rossa.
The programme promises to reduce the tax and PRSI take on the income of a single person on an average £15,000 income from 27 per cent to 22 per cent, and for a married couple, on one income, from 20 per cent to 14 per cent.
The manifestos of all three Coalition parties will be in line with this commitment and will aim to offer the greatest gains from tax reductions to those on average and lower incomes, while also providing significant gains to the better-off. Under the "21 Goals" programme, a single person on £15,000 would pay about £800 less in tax a year after five years, while the bill for a married couple would fall by about £900 a year.
Many higher earners would benefit by much more in cash terms, but the gains would be less as a proportion of their total earnings.
Fianna Fail will today publish its tax proposals as part of its manifesto. These are expected to promise a reduction in the top tax rate to 43 per cent from 48 per cent, and also a cut in the standard 26 per cent rate.
The Taoiseach, Mr Bruton, informed a packed Dail at 11.45 a.m. yesterday that he was proceeding immediately to Aras an Uachtarain to seek a dissolution from the President, Mrs Robinson.
In a warrant signed jointly by the President and Mr Bruton at 12.10 p.m., the 27th Dail was dissolved and the incoming Dail was summoned to meet on Thursday June 26th, at 3 p.m.
But Fianna Fail dismissed the "21 Goals" document as "a holding statement full of wishy-washy, aspirations". In a statement headed "21 Holes in the 21 Goals", the party said the Government document was politics at its worst - all smoke and mirrors with no real substance."
The pledge to cut the tax take was the only fixed target in the largely aspirational document.
Fianna Fail will unveil its 160-page mapifesto at 11 a.m. today.
. An opinion poll in today's Irish Independent showed the state of the parties as: Fianna Fail 42 per cent, Fine Gael 26 per cent, Labour 12 per cent, the PDs 6 per cent, Democratic Left 2 per cent, the Greens 4 per cent, and others 8 per cent. The results show a drop of 3 per cent for Fianna Fail compared to the newspaper's previous poll.
The poll, conducted on Wednesday, gives the FF/PD alliance an eight-point lead over the Rainbow Coalition. However, when asked to make a choice between the two coalition possibilities, the FF/PD coalition scored 46 per cent compared to 37 per cent for the Rainbow Coalition.