Tax Cuts and Laffer Curves

One of my right wing correspondents is giving me the business lately about how cutting taxes will be a free ride, leading to higher tax revenue and balancing the budget.  Of course this is now a standard Republican talking point.  Here's my primer:

The Laffer Curve says that if you raise taxes on and on, eventually you get to a point where the higher taxes lead to less revenue. For example: if taxes go from 99% to 100%, obviously people will stop working and revenues will go down. I don't doubt that's true too if marginal tax rates go from 90% to 95%. On the other end of the curve, tax rates going from 0% to 1% will increase revenue even though taxes are going up, since at 0% revenue is 0. Hopefully conservatives even agree that raising taxes from 1% to 10% would raise revenue, since people would still be keeping the vast majority of their money.
So the question is: what's the "sweet spot" marginal tax rate (or corporate tax rate, or sales tax rate, or whatever) that maximizes government revenue? Obviously it's not 95% and it's not 1%; it's somewhere in the middle. So now the top marginal tax rate is 35%. In the late 90s it was 39.6% and the budget was balanced. In the late 50s the rate was 91%, and in 1945 it was 94%! (Data is here.)
Nobody is arguing that we should go back to 90+% rates. But if conservatives think that revenues will go up if we reduce rates from the current 35%, then what are they proposing is the Sweet Spot?
I'm not saying that government should put tax rates in exactly the spot at which revenue is maximized. I happen to think the "sweet spot" is probably way higher than 40%, but government shouldn't try to raise more money than it needs. I know the reason conservatives want lower taxes isn't so government can have more revenue, but so citizens get to keep more of their own money. Conservatives don't care if government revenue goes down- that's a feature, not a bug. And when you reduce tax rates at these levels revenue is lower than it would have been:

Notice the Bush tax cuts in 2001 and 2003 were followed by revenue declines. Yes, they went back up as the Bubble economy grew in the 00's, but still not to the trend line they had been on. And of course they cratered again when the recession hit. Also look at revenues after the 1991 GHWB tax hike- going up steadily. And look at revenues after the early 1980s Reagan tax cuts at the start of the graph- flat, not starting to rise until Reagan increased taxes in the middle of his term.
So when one looks at actual data, it shows that- surprise!- when you raise taxes while they're at our current rates, you also raise revenue. When you cut taxes you cut revenue- there's no such thing as a free lunch in the real world.
Now reasonable people can be in favor of lower taxes anyway. They don't need to make ludicrous arguments like the Laffer Curve. The Republican party is in favor of lower taxes because they feel it is more free to pay less taxes. They don't really care about the deficit, as they've shown really clearly every time they've been in charge. They didn't care about the exploding deficit during the Bush years. I just wish conservatives would all be honest about that- there's no free lunch, and lower tax rates will lead to lower revenue which will lead to bigger deficits.

What?  Republicans don't care about the deficit? That can't be true, you say!  Well here's a graph of federal deficits since 1970:

Republicans controlled the Senate and the presidency in the 1980s, and deficits went up a lot.  Divided government in the 1990s resulted in a decreased deficit, even a surplus.  Then sole Republican control returned in 2001 and the deficit went up, culminating in a huge increase at the end of George W Bush's second term when revenues cratered due to the recession.  And see how the deficit is projected to go back down soon?  That's the expiration of the Bush tax cuts in 2012.  Which Republicans universally oppose.  Because they're against deficits.... or something.
(Source for the last graph is here.  This is a great website, with graphs you can customize)