This is the Laffer curve, showing how, as the tax rate rises, government revenue will
first increase, due to the increased taxes, but later decrease, as economic growth is
inhibited. Not many people disagree with the two endpoints representing tax rates of 0%
and 100%; if there are no taxes the government has no revenue, if the taxes are 100% then
the economy will basically grind to a halt. The big question is what happens in the middle
and Laffer obviously thought he had the answer. 
Many people also talk about "feedback" from the Laffer curve, that is,
government revenue will actually increase due to the increase in economic activity created
by the tax cut. This is completely true only in an economy without inflation. In an
inflationless economy real GNP and money GNP are the same so if economic activity
increases so do tax revenues. Reagan took office when inflation was running rampant,about
12%, and so this "feedback" didn't occur.