Rebel Labour TD Patrick Nulty has walked off the Government benches, warning that Budget 2012 should have targeted the wealthy.
The Dublin West deputy - the fourth to leave the coalition - denounced the measures as "unjust" and claimed they would damage Ireland's chances of recovery.
"I think a really difficult choice would have been to ask those who are wealthy in our society to contribute more," Mr Nulty said.
"It's profoundly unfair, it cuts payments for young people with disabilities, it takes away the fuel allowance from our elderly people and it undermines people trying to get back to work."
Mr Nulty, the party's newest TD, elected in October, became the third member of the party to bail out over budget cuts in the last few weeks. Sinn Fein president Gerry Adams had earlier pressured disgruntled backbenchers to revolt.
The 29-year-old said the Budget would hit people on low and average incomes disproportionately, lead to higher levels of unemployment while attacking the marginalised, the sick, the elderly and young people with disabilities.
"The household charge combined with the increase in VAT is deeply regressive, unfair and ultimately counterproductive," he said.
"People on low and average incomes will be disproportionately affected while the wealthy benefit from flat rate taxation levied in this manner."
Just last week, Mr Nulty pledged support to Labour veteran Tommy Broughan after he left the Government benches over the renewal of the bank guarantee scheme.
Mr Nulty is the fourth Government TD to leave the coalition. Alongside Mr Broughan, former Junior Minister Willie Penrose left over the closure of Columb Barracks in Mullingar while Denis Naughten was expelled from Fine Gael for refusing to support cutbacks at Roscommon hospital.