I'm just posting this because I often have to refute this misconception.

Via World Mag Blog:

A new study by the Tax Foundation has found that "America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes."

But here's the kicker: In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.

Of course, you're not hearing this from the media (quite the opposite, it seems).

And, while we're on the subject...

The benefits of low taxes are on full display in Iceland, which provides an almost perfect demonstration of the Laffer Curve. From 1991 to 2001, as the corporate-tax rate fell gradually to 18% from 45%, tax revenues tripled to 9.1 billion kronas ($134 million in today's exchange rate) from just above 3 billion kronas. Since 2001, revenues more than tripled again to an estimated 33 billion kronas last year.

Laffer predicted that lowering tax rates, until a certain point, would increase government tax income by stimulating the economy to produce more wealth overall.

It's a curve because obviously at some low point the government start to lose again -- since a 0% tax rate must result in zero tax income. (But we're nowhere near that point yet.) And obviously, at an actual 100% tax rate, everyone starves, so tax collected must ultimately become zero there also. So Laffer predicted, reasonably (but also surprisingly, given the common wisdom) that a curve must connect the two ends.