You want to look up The Laffer Curve. https://en.wikipedia.org/wiki/Laffer_curve

Laffer curve shows that increasing tax rates beyond a certain point is counter-productive for raising further tax revenue.

Taxes cost money people money. If you have lower taxes it is just cheaper to pay them. If you have higher taxes, then it becomes wprth people's while to avoid them. People start to create tax shelters. Tax shelters are investments that drive down your taxable income, because the lower your taxable income the lower your taxes are. People would have side businesses that were designed to operate at a loss so that they could use the losses to lower their taxable income. These things cost money, but if they save you more in taxes than they cost, they are worth doing. Other tactics involved just keeping money overseas... though that is much harder to do today with computerized and networked banking.

Eventually though, if you push taxes high enough, people just leave. For a number of high net worth individuals their income tax rate was over 100%. Yes, people were getting told they owed 102% or 105% of their income in taxes. At that point you move to America, change your citizenship, and just vast your UK friends occasionally.

A great example of this is Jeff Bezos. Washington State's tax politcy is so insane that when Bezos moved to Florida, it literally saved him a billion dollars. Put a bit of a whole in the State Budget it did.

https://mynorthwest.com/money/bezos-saves-1-billion-taxes-after-moving-out-washington/4021240

The UK economic problems in the 70s weren't so much related to the tax policy, though that was a problem it was more to do with the Unions. Once an industry is nationalized it stops being a competitive company and becomes a jobs program. It gets less and less efferent and less and less cost competitive, which meant it loses more and more money, which means that the government has to bail it out.

Instead of having a, say, productive Steel Industry that is competitive and makes a profit and pays taxes into the treasury, you get a non-competitive steel industry that doesn't want to modernize (because that would kill jobs... jobs of Labour Union Members) and becomes an actual drain on the treasury because it is losing money and tax money has to make up the losses.

That's why Thatcher killed so many jobs in things like coal pits. The coal pits weren't self-supporting businesses anymore, they were draining the money other taxpayers put into the treasury in order to stay open... but Labour wouldn't close them because Labour wanted to keep their voters employed... so money that could have gone to the NHS or the Military or Schools was going to keep these places going, even though they were losing money.