If you want the rich to pay more tax, let them grow even richer It is true that these figures don't include overseas income for the 100,000 or so non-doms - a shrinking group now hit by an annual fee of £50,000 - but they pay full tax on all UK-generated income, and on all income brought into the UK. This helps Britain capture more tax than it would otherwise have by attracting mobile and generally foreign-born big spenders; Greek shipping tycoons were the original non-doms. And of course, people who don't live in the UK don't pay tax here, which, contrary to what some claim, is not a scandal. The better-off are heavily hit in other ways. The highest-rated 0.6pc of homes generate 1.2pc of council tax; the priciest 1.6pc yield 26pc of stamp duty even before the latest hike; and the top 0.7pc contribute 36pc of inheritance tax receipts from housing. Again, there are loopholes; everybody should face the same rules, regardless of what lawyer they can afford. But this should not be allowed to negate the fact that most high earners pay vast amounts in tax. History is clear: the best way to make sure the rich pay more is to cut tax rates and allow ambitious folk to earn as much as they can. During the 1970s, when the tax system specialised in inflicting pain, the top one per cent of earners contributed 11pc of income tax. By 1986-87, with the top rate down to 60pc, that had increased to 14pc. After the top rate fell to 40pc in 1988, the top 1pc's share jumped, reaching 21.3pc by 1999-2000, 24.4pc in 2007-08 and 26.5pc in 2009-10. Lower taxes fuelled a hard-work culture and an entrepreneurial revolution. Combined with globalisation and the much greater rewards available for skilled workers, Britain's most successful individuals earned a lot and paid a lot in tax. Yet times are changing, and not just because of the recession. HMRC recently slashed its forecasts for revenues from the top 1pc. It now believes the number of people expected to report £500,000 or more in earnings will fall by a tenth this year; those on £2m are set to drop by a third. Overall income tax receipts fell over the summer, partly because of this. Bonuses are down, as is the number of bankers. Some of this is inevitable: we are in recession, the City had overreached and pay was artificially bloated. Some income is being delayed until the top tax rate falls. But the war on wealth, and regulatory overreaction towards finance, is also having an effect. Capital gains tax is too high. Luxury homes transactions are falling because of higher stamp duty. Britain is now a high tax economy; this is distorting work and investment decisions, gradually shifting talent and capital overseas. The overwhelming majority of high earners are already contributing disproportionately to the exchequer; tightening the screws further will be disastrously counter-productive. The lesson of the past 30 years is clear: the best way to entice the rich to pay even more tax is to keep rates low and allow them to get even richer. It may not please Lib Dem class warriors, but it works.