Economics: It was PG Wodehouse, I think, who defined a gentleman as someone who could play the accordion, but didn't. The observation is a little unfair - the man who plays the accordion on Dublin's Wicklow Street on weekend evenings is a joy to hear.

But I do confess that, when given one for Christmas as a child by some neighbours, I came to the conclusion they mustn't have liked my parents. After a polite effort to learn how to play, I put it in the attic forever.

But my few hours of effort did teach me something profound about economics. I learned how tax reform should be implemented. Squeeze an accordion where the gap between both handles is narrow, and you get a whimper. Squeeze it where the gap between both handles is wide, and you get a blast. Reduce a tax where it is already close to optimal levels, and the impact is minimal. Reduce a tax where it is far from those levels, and it is profound.

At their conference last weekend, the Progressive Democrats decided that the era of tax cuts was not over. They have calculated that, over the period of the next government, economic growth will generate an additional €36 billion in tax revenues, around €5 billion of which they say should be given back to taxpayers. Importantly, they have chosen to do this by cutting income tax.

This policy can be assessed in three ways: the macroeconomic cycle approach; the political economy approach; and the "accordion" approach.

Depending on how it is timed, this policy might make sense in terms of the macroeconomic cycle. A very severe shock some years on might justify a boosting of the economy. Tax cuts tend to get into the economy's bloodstream faster than increases in government spending.

The fact that government spending rises are hard to reverse when the economy improves makes them an inflexible and counter-productive option. So at least holding open the chance of tax cuts is a good idea.

But I doubt whether cyclical management of the economy is what the PDs are up to here. Were the PDs to enter the next government and were that €36 billion to materialise, spending it all on generous increases in public sector pay wouldn't exactly please their core voters. But then all is fair in love, war and politics.

A party born to advocate tax cuts should do just that or lose relevance, just as a party born to advocate increased tax and spending should do just that or lose relevance.

And there is much evidence that as far as the total burden is concerned, Ireland is no longer a "low-tax" economy. When expressed as a ratio of Gross Domestic Product (GDP) - the value of goods and services produced within the State - our tax burden is just 29.7 per cent and this apparently compares well with an OECD average of 36.3 per cent.

But about 20 per cent of Ireland's GDP is generated by multinationals and Gross National Product (GNP) - the value of goods and services produced by Irish-owned entities - is consequently much lower than GDP relative to most OECD countries. For this reason, GNP is a far more relevant denominator than GDP when measuring Ireland's tax burden. As a share of GNP that burden is 35 per cent.

And there are further reasons why even this number may understate the tax burden. Our population is younger than the OECD average. This means that our health spending and pensions spending should be lower, other things being equal. The fact that it isn't means that we are overspending elsewhere.

Two years ago, an analysis of health and education spending in the OECD club of countries, conducted by expert fiscal economists, suggested that our health and education services may be among the least efficient in the OECD.

Now if public spending is as efficient as it can be, then there is a case for holding tax levels where they are, if not increasing them, to fund increased public services. But, if not, hard-earned taxpayers' money is being wasted on public sector inefficiency. If you can't get a bucket to stop leaking, you might as well salvage some of the water.

The real question is whether tax cuts, if they do indeed occur, should come in the form of income tax cuts.

This is where my old friend the accordion comes in. According to the OECD, taxes on workers in Ireland are fourth lowest among the members of this club of the world's most advanced countries. Only Korea, Mexico and New Zealand have lower income taxes. For low-income earners the so-called "tax wedge" - the difference between what employers pay their workers and what the workers take home after tax - is actually lower in Ireland than in any other OECD country. As an instrument of economic policy, there is not much squeeze left in income taxes.

The most striking fact in this debate is how income taxes have already shrunk as a share of the total tax take. Last year for the first time in fiscal memory, Irish taxpayers paid more to the Government in VAT than they did in income taxes. This reflects not only the fact that - unlike income taxes - our VAT rates are among the highest in the EU, but also that VAT thresholds have failed to keep pace with Ireland's high rates of inflation.

And as a result of rampant house prices Irish housebuyers will soon pay more to the Government in stamp duty than is paid in corporation tax, and almost half what they pay in income tax.

According to the PD figures, a married couple with joint earnings of €75,000 will benefit to the tune of €6,760 a year from their proposed tax cuts. But every time that couple goes to buy a bog-standard house that benefit will be wiped out three to four times over.

And that couple now probably pays more each year in accumulated VAT than it does in income tax.

Unlike income tax cuts, reducing these other taxes would help to dampen inflation by lowering the cost of living. If the next government does decide to squeeze on taxation, this is where it will get the most results. Of course, just like an accordion, this is also where it will encounter the most resistance.