This is the standard Reaganomics argument. The Laffer Curve looks really good on a cocktail napkin. Not so much in real life, as evidenced by the dramatic change in our debt level during the Reagan administration.
It’s true that you can’t tax people infinitely and expect revenue to increase infinitely. It’s also true that you can’t cut taxes infinitely and expect revenue to increase infinitely. Part of that problem is that we have demonstrated that cutting taxes on the rich doesn’t necessarily translate into more jobs. Jobs materialize when an employer has work he needs someone to do. They don’t necessarily materialize just because an employer has extra money lying around.
The highest tax bracket in our country’s history was 92% in the fifties. That was the amount one had to pay on the amount of taxable income over $400,000 (a lot of money back then). You would think that taxing some of the income of America’s richest at 92% would have completely squelched the economy. Nope — the economy thrived. I’m not suggesting that we return to 92% tax brackets. But it shows we still have a fair amount of room before the economy suffers due to impossibly high taxes.