The essence of the GOP tax lie is the mirror image of "trickle down" theory. Just as supply-side economics insists that letting the wealthiest Americans keep ever-increasing percentages of their income will create a tide that lifts all boats, so too does that doctrine hold to the notion that increasing marginal income tax rates at the top end of the income scale will sink the economy.
When the Clinton administration increased marginal tax rates on high incomes in 1993 (a key element in allowing the Republicans to re-take Congress in the 1994 election), there was a steady drumbeat of claims from the right that the effects would be disastrous. I'm unaware of which (if any) of the experts who made such forecasts have apologized for their error, and have re-calibrated their economic theories to take their error into account.
They were wrong then, and are wrong now.
There actually is a case to be made that high marginal income tax rates at the top of the income scale can create a disincentive to economic activity (and, conversely, that reducing such rates can have the opposite effect). In fact, it's a good enough argument that I remember it from college over 30 years ago. At the time (1974), the example most often cited was the reduction of the top marginal rates during the Kennedy administration. More recently, some make the same case for reductions during the Reagan administration.
It's not that the theory is wrong; it's that it is inapplicable to the current dispute (just as it was in 1993). In order to understand why, one needs to examine just what those those top rates were back in 1960 (or 1980). http://en.wikipedia.org/...
Even a fairly disengaged undergraduate could understand that "changing the game" so that a person could keep a net 23% of their additional income rather than 9% would create an incentive (i.e. reduce a disincentive) to make effort and take risk. Similarly, the Reagan-era change that increased the after-tax take from 30% to 50% can be seen as having created such incentives.
But are we to seriously believe that there is a similarly significant difference between the sort of effort and risk that the wealthiest Americans are willing to make and take if they can keep 60% of the net profits and that associated with being able to keep 65%? The doomsday prognosticators in 1993 insisted that the difference was comparable to the differences between 9% and 23%, or 50% and 30%. They were wrong then. They are wrong now.
Some are much worse than simply wrong; they are deliberately misleading in the service of patrons for whom that extra 5% (like the limitation or elimination of taxes on estates and capital gains) is the equivalent of a monetary land grab.