The idea is that the more we tax them the less productive they'll be or something. As explained by the Laffer Curve, a popular staple of supply-side economics. Basically if we suddenly start taxing them on this money they were hiding, they'll have less money to be able to pay for capital and labor. Then the business will lose productivity and the government will lose taxes and workers will get fired and so forth. Nothing in that scenario about the people at the top taking home less pay, but they worked hard to not be productive so the only sane solution is to fire a bunch of bottom rung workers rather than take a pay cut.
Did I mention how the entire point of supply-side economics seems to be based on making rich dudes even richer?
A good businessman will keep the tax savings unless it's more profitable to put the money back into his business. Supply-side makes the rich richer either way; whether this is at public expense is perhaps debatable, but the public assumes all the risk while the businessman always profits. It's no wonder it's popular among rich people.
This got me thinking about an article on Bob Cringely's site commending an Indian twenty-something millionaire who owned a string of e-book sites, the dodgy sort that hype an e-book using rambling marketing text, copious amounts of yellow highlight and probably-fake testimonials, and charge $80 for the PDF. The comments were remarkably polarized and at first I couldn't understand why.
Then I realized that it depends who you identify with: the buyer, or the seller. Readers who coveted the seller's financial success were sympathetic to the seller because they wish it was them making all that money. Readers sympathetic to the buyers thought it was a scam, because they imagined that they would hate to pay over the odds for a flashily-hyped product.
Perhaps this is the same mentality behind the Tea Party. Middle classes turned out to protest a tax that only applied to much wealthier people, because they wish they were those rich people.