Workers will be able to earn up to €1,000 a week before they pay the 40% top rate of tax under new plans.

Budget 2027 will be the first step of a grand strategy by Tánaiste and Minister for Finance Simon Harris, who is ‘on the hunt for a legacy’, one minister said.

As pre-Budget speculation accelerates, Fine Gael leader Mr Harris has remained coy over his key plans, but sources within the party confirmed: ‘He has made it very clear to the party that his primary intention is to ensure no one earning less than a €1,000 a week will pay the higher rate of tax.’

Currently, single taxpayers enter the higher rate of tax band once they earn more than €44,000 – just below the current average salary of €44,200. Raising it to €1,000 a week would amount to €52,000 a year.

One minister said: ‘The Tánaiste is very cognisant that the squeezed middle felt ignored by the last Budget. There was nothing for them in it. 

'That is an error which will not be repeated this year now that he’s in Finance. Harris is on the hunt for a legacy and he has two years as Finance Minister to secure it.’ 

One senior Government source said: ‘Getting to the €52,000 band will not be easy after the decision to freeze the current standard rate but the Tánaiste is determined to get to that mark sooner than later.

As pre-Budget speculation accelerates, Fine Gael leader Mr Harris has remained coy over his key plans, but sources within the party confirmed: ‘He has made it very clear to the party that his primary intention is to ensure no one earning less than a €1,000 a week will pay the higher rate of tax.’

Currently, single taxpayers enter the higher rate of tax band once they earn more than €44,000 – just below the current average salary of €44,200. Raising it to €1,000 a week would amount to €52,000 a year.

One minister said: ‘The Tánaiste is very cognisant that the squeezed middle felt ignored by the last Budget. There was nothing for them in it. That is an error which

‘He is a man who likes simple phrases when communicating with the public. Earning a grand a week before you hit the top rate of tax is one of those phrases.

‘He wants to make sure that is associated with Fine Gael and that Fianna Fáil aren’t sharing the applause. Don’t forget there is a lot of cash rolling around in the coffers. There is €8.5billion for spending and tax cuts.’

One senior Fine Gael minister added: ‘Under Enda Kenny and Leo Varadkar the standard rate threshold rose from €33,000 to €44,000. Getting it up to €52,000 is the logical last step.’ 

Another senior Government source said: ‘The key to understanding the positioning of Harris on this is he is not from one of the great dynasties.

‘He is from a very working-class background, a taxi driver and a nurse, emotionally and intuitively he intends to prioritize their concerns and he sees tax reform as being central to it.

‘There will be four priorities in this Budget: real tax cuts, the Savings and Investment Account, real major change in disability and childcare.

‘We are very keen to end the scenario where childcare has been a second mortgage levied on the backs of the working new poor. It is going to be a political Budget and Simon is going to be at the heart of it. Critics should note that indexation is a key element of the Programme for Government manifesto. We are engaging what we pledged to do. A “grand a week” is the final push. It is doing what we have stood for over two decades.’

The determination of Mr Harris to seize control of the tax-cutting agenda has infuriated his Fianna Fáil Coalition partners.

One source noted: ‘It is not easy for Jack [Chambers]. At least he could understand Paschal [Donohoe]. He doesn’t know what Simon is thinking.

‘Technically Micheál [Martin] has his back, but Jack has learnt by now that is not a safe place to be. He is surrounded by sharks.’

Influential Fianna Fáil power-broker Niall Collins publicly criticised Fine Gael’s attempts to annex the tax-cutting element of the Budget. He said: ‘Looking after working people and the squeezed middle is our priority. They were squeezed out last year.’ Citing the declaration by Mr Chambers that Fianna Fáil would be supporting tax cuts, Mr Collins said: ‘Fianna Fáil have been very clear it won’t happen this year.’ One FF minister noted: ‘Fine Gael have a cheek claiming they are the party of low taxes. Last year they gave all the tax cuts to wealthy SUV drivers.’

It comes as tensions are rising between ministers and the Irish Fiscal Advisory Council and the Central Bank over excessive State spending warnings from both. However, one senior Coalition source said: ‘These comfortably appointed lecturers with their Easter, summer and Christmas holidays and permanent tenures can talk all the theories they want. We are going to look after the squeezed middle.’