The argument that if you tax something more you get less out of it has validity. however given that the world population passed 7 billion in March 2012, it would be interesting to debate that there should be no taxation, and no government at all.
Somalia is an interesting example of a country without a government, it has had none since 1991 and is in chaos, and up to one million people have died during that period of famine and disease.
Governments may cost too much money, pass too many laws, and do many things that their citizens don’t like, but there would be chaos without government, it is a necessary evil.
Therefore there has to be some government in any country, there are just too many people alive in this world now to return to the hunter gatherer society that once existed.
Therefore the question of whether taxation is a disincentive has to take into account the benefits that a properly functioning government brings to a country, too much taxation may reduce performance, too little may destabilise a country, through lack of proper systems of government, poor infrastructure, and lack of rule of law. No business can function well in a crime ridden society. In the modern world a business benefits from stable societies, as does everyone, these things have to be paid for.
Therefore the first calculation has to be at what level of taxation does government fail to provide the stable society necessary for a business or individual to operate effectively. Poor transport links, road maintenance, lack of traffic management may mean an individual could not get to their place of work, easily. That clearly reduces ability to work.
Poor policing, and lack of welfare benefits may increase crime, that too reduces economic effectiveness. Education is a necessary requirement for anyone to participate in an economy, therefore a minimum level of taxation is required to pay for education.
There may well come a point where government passes too many laws, makes poor decisions, and various other things, but the idea that all taxation is bad is a flawed concept.
Then there are arguments about what level of taxation is appropriate to ensure the stability necessary for good governance, and good economic performance, and at what point taxation becomes a disincentive. Which raises issues about progressive taxation, the incidence of taxation, and the effectiveness of the Laffer Curve. Which are issues relating to who bears the biggest burden of taxation, the richer or the poorer. Who really pays a tax, taxes on wages may appear unreasonable but in reality wages are probably higher to compensate, and therefore the incidence of taxation might fall upon employers more than employees. The Laffer Curve is an argument that too high taxation reduces revenue.
All of these are interesting issues in this debate, however detailed discussion are both above the pay grade, and too detailed an analysis would be required to stay within the word limit.