The Irish Congress of Trade Unions (Ictu) is to lodge a formal complaint to the EU over the expansion of the business expansion and seed capital (BES)schemes in the Budget.
Ictu economic adviser Paul Sweeney described the measures as expanded vehicles for tax avoidance for wealthy people.
"The schemes may appear as if they are helping small businesses, but their main effect is to shield high income earners, who invest in what are too often risk-free BES schemes, from income tax," he said.
Mr Sweeney said that Ictu did not oppose genuine initiatives to support small businesses, but that tax-based schemes were not the way forward.
Congress is lodging the complaint with the European Commission on the basis that, as State aid, the schemes require EU approval.
Business organisations have slammed Ictu's decision.
Mark Fielding, chief executive of Isme which represents small businesses, described the move as "outrageous" and yet another attempt by Congress to undermine small enterprises and, in the process, threaten the very viability of the economy.
He said the BES scheme had benefited hundreds of companies and led to the creation of thousands of jobs over the last number of years.
The new initiatives were introduced to ensure that Ireland continues to develop an enterprise culture, he said
"One would have to question if the policy advisers in Ictu are living on the same planet as the rest of us and actually understand that enterprise is good for the economy and society in general. The union's luddite policies represent a pernicious threat to the country's economic growth and development," said Mr Fielding.
Chambers Ireland director of policy Seán Murphy said that Ictu appears to have missed the link between wealth creation and tax generation and the ongoing need to foster an entrepreneurial economy.
"The current Irish economy is characterised by an over-dependence on construction and foreign direct investment to create and drive jobs and tax revenues. An enhanced BES scheme is vital to the creation of viable, competitive Irish-owned businesses that can compete internationally while also creating wealth," he said.
The Irish Taxation Institute (ITI) called on Ictu to reconsider its decision.
"Innovative tax policies stimulate economic activity, create employment and generate revenue for investment in public services," said ITI president Dermot O'Brien .
