The Tánaiste and Labour Party leader Joan Burton is in direct odds with Fine Gael on the Universal Social Charge ahead of the general election.

While both parties favour abolishing the charge for low and middle income earners during the life of the next government, Labour feels it should remain in place for higher earners.

Fine Gael is expected to announce a significant cut in the tax in 2017 in its election manifesto which will pledge to get rid of the charge for all workers.

However, it is not known what the level of reduction will be.

The Irish Times says the party will position itself in favour of tax cuts over increases in public spending in its election manifesto, which will be outlined to members this week.

However, it is believed that the amount of money available for tax cuts and spending increases in the next budget could be as low as one-third of the €1.5bn package already announced for 2016.

Today's report follows Taoiseach Enda Kenny's announcement last month that Fine Gael's election manifesto will include the total abolition of the USC.

He described the USC as a savage tax introduced by Fianna Fáil because of the financial crisis.

USC was introduced in 2011, replacing the health contribution, and brings in about €4.5bn for the state each year. The latest USC changes will bring marginal tax rate to 49.5% for all earners under €70,044.

USC rates were cut from 1.5% to 1%, from 3.5% to 3%, from 7% to 5.5%. Around 42,500 workers will be removed from paying USC completely due to the measures announced in last month's budget.

Ms Burton says while she welcomes plans to cut and eventually abolish the charge on lower income workers, she believes it should stay for those on higher salaries.