This is the substitution effect–because leisure becomes relatively cheaper, people consume more of it. But higher taxes also reduce after-tax income (obviously), so in order to maintain living standards, one might decide to work more in the face of higher taxes. This is called the income effect. I can speak for my household–our after-tax income is more than sufficient for our “needs,” but if we were taxed more, we might have to work more to satisfy these “needs.”
It is an empirical question as to whether within certain ranges of tax rates, raising taxes increases or reduces effort. Theory gives us an ambiguous answer. (h/t Mark Thoma).