Why the top tax rate of 45p is like half price Pinot Grigio in Tesco

We have all been there, walking past the end of an aisle when the headline grabs us. Why Pinot Grigio down from £9.99 to £4.99, that is an absolute bargain, I must have some.

Of course when you get home the quality suggests a £5 (at best!) wine that they seem to have been asking customers to pay £10 for over the last few weeks.

Well, the analogy is that the tax rate cut yesterday is similar. A previous chancellor told all the Higher Rate Pinot Grigio customers that the price was going up, so they all stocked up while the rate was at 40%, well the price went up to 50% and no-one bought any.

Well the good news is that the price is being cut permanently down to just 45% (£4.99) and like Tesco does, George Osborne now hopes customers will be unable to resist the temptation to take part at similar levels to previous sales.

The only issue is that, like the Pinot Grigio, it still isn’t that appealing at that price and the customers have been burned by the high price, have looked at other places and just might not come back in the same numbers they once did. George like Tesco has a problem.