Instead of raising more money, her autumn Budget tax onslaught risks slashing Treasury revenues as individuals and businesses shift their behaviour to escape the squeeze.

Incredibly, she was warned this would happen.

It’s all down to something called the Laffer curve – which shows that if you drive tax rates too high, you actually collect less revenue.

Many on the left claim the Laffer curve doesn’t exist, but that’s like saying gravity doesn’t exist. At the extreme end of the curve, a 100% tax rate would raise precisely zero because nobody would bother working.

Thankfully, Reeves hasn’t gone that far – yet. But the Laffer curve kicks in at much lower marginal tax rates, as she’s just discovering.

Britain’s tax burden is set to hit a post-war high of 37.7% by 2027/28, but for many Labour activists, that’s still nowhere enough.

One of their favourite targets? Capital gains tax (CGT). They see it as easy money. Just hike CGT rates to match income tax bands, and the cash will pour in.

But tax policy isn’t that simple, as Reeves is learning the hard way. And despite warnings from her own tax bods.

HMRC has previously estimated that raising the higher CGT rate by 10 percentage points would actually cut tax revenues by more than £2billion, a drop of around 7.5%

That didn’t stop former Tory Chancellor Jeremy Hunt from hacking the annual CGT-free allowance from £12,300 to just £3,000.

Not to be outdone, in the Budget Reeves hiked CGT on non-property assets to 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers.

She also cut tax relief for small business owners and entrepreneurs.

Now the Office for Budget Responsibility (OBR) has slashed its forecast for CGT, and by a lot more than £2billion.

Charlene Young, senior pensions and savings expert at AJ Bell, sums up the disaster: “Just five months after the Budget, the OBR has wiped £23billion off the projected CGT take by 2030.”

That’s a staggering sum.

This year, CGT will bring in 8.5% less than last. Despite Hunt and Reeves’s efforts.

Young says the Laffer curve is to blame. “It shows that increasing tax above a certain ‘sweet spot’ alters taxpayer behaviour to the extent that the revenue can go down.”

Yet Reeves ignored the warnings and missed the sweet spot.

The left clings to the myth that raising taxes always brings in more money. In reality, it often does the exact opposite. Reeves – and Hunt before her – have shown that.

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When taxes rise, people adapt. Some work less because they don’t see the point. With CGT, some delay selling assets to postpone the pain or maybe avoid it altogether.

Entrepreneurs and business owners, who should be driving the economy, have fewer incentives to work hard and expand if HMRC grabs more.

This doesn’t just apply to CGT. The moment Reeves threatened tax hikes in her autumn Budget, growth stalled. It still hasn’t recovered.

And her short-sighted £25billion National Insurance raid on employers will wreak havoc from next month.

Taxpayers don’t like being taken for fools. Instead, they’ve made Rachel Reeves look like one. Will she learn? Has she ever?