The "vilification" and repeated targeting of those earning over €70,000 smacks of a system that wants to penalise rather than reward success, the head of the country's biggest business body has claimed.

IBEC director general Danny McCoy, inset, also warned that scrapping or dramatically cutting the Universal Social Charge (USC) risked hollowing out the tax base. The lobby group warned that business was increasingly concerned that "populist" election positions risked repeating serious economic mistakes of the past.

"Yes, we need tax reform, but it needs to be focused on where we are most out of line internationally," Mr McCoy said.

"The vilification and repeated targeting of anyone earning over €70,000 smacks of a country that wants to penalise rather than reward success." The Government introduced USC reductions in the last two Budgets, but capped the benefit at €70,000.

Taoiseach Enda Kenny has said talk of an economic recovery will lead to high wage expectations but the abolition of the USC can relieve pressure on employers. The Irish Independent reported earlier this month that Fine Gael is planning to introduce a new levy on workers earning over €100,000 after it scraps the controversial tax.

Mr McCoy said Ireland's income tax system is already "unbalanced" and claimed political promises risk making the problem worse.

"The clamour to narrow the tax base by dramatically cutting or abolishing the USC is a race to repeat past mistakes," he said.

"It will hollow out the tax system, make it overly reliant on a small pool of taxpayers and leave Ireland vulnerable to future economic shocks at a time of heightened global uncertainty."

Indo Business