I’m not here to argue big government / small government with you. What I am here to talk about is how we can justify taxation as right, while, for example, a protection racket run by the mafia is wrong.
Unlike protection rackets taxation gives us something in return, namely public goods which benefit all citizens. Studies have shown that it is unlikely for people to organize to provide public goods by themselves (see the free rider problem), and thus it is in everyone’s best interests for the government to provide these goods and to support them with mandatory taxation. The protection racket of course promises to give citizens something as well, namely safety, but because the problem is created by the people collecting the money the whole enterprise cannot be defended in this way. (Of course a second group would be able to justify collecting money in order to stop the mafia; generally we call them the police.)
A more interesting question is “how should we tax people?” Since we all receive basically the same benefits from public goods it might seem reasonable to make us all pat the same tax. After all we both get the same benefit from interstate highways, so why should you have to pay more in taxes simply because you earn more? Such taxation systems have been proposed before for just these reasons. However uneven taxation based on income can be justified in two ways.
One way to justify it is to hold that the rich are in debt to the poor (ethically, not financially), and thus progressive taxation (taxing the rich more) is justified because it helps correct this moral problem. Of course not many people feel that the rich actually owe the poor anything, so it is rare to hear progressive taxes justified in this way.
Alternatively we can suppose that money is worth more or less to different people; that the rich value money less and the poor value it more. Thus progressive taxation “costs” everyone about the same even though they pay different amounts of money. We could then defend this practice on grounds of fairness, since the real costs to everyone are the same as the value they receive (since being rich doesn’t diminish your appreciation of roads or national defense). Or if we were utilitarians we might say that the total happiness of society is maximized by progressive taxation, since a flat tax would make the rich only a little happier but would make the poor much less happy.
Of course just because we can justify progressive taxation doesn’t mean that we can justify all aspects of real tax systems. One flaw in the US tax system is the IRS. Of course we need to have someone to collect the taxes, but the size and cost of maintaining the IRS is excessively large because of the unnecessarily complicated tax system. It seems reasonable to suppose that society would be better off with a simpler tax system which would allow us to have a smaller IRS and pay less in taxes.
A more significant flaw in the US tax system is the uneven distribution of government spending. Ideally since we all pay the same taxes to the government we should all get the same benefits from those taxes. Unfortunately government spending doesn’t work that way and some states receive more from government spending than they paid and some sates receive less, for example California gets approximately 90 cents back for every dollar last time I checked. The only way to defend this inequality would be to suppose that people living in some states valued money more or less than those living in other states, which seems unlikely.
In conclusion taxes in principle can be justified, but since reality is often imperfect no actual tax system, to the best of my knowledge, is perfectly just.