This is an interesting issue. Nowadays we think of taxation as some sort of inalienable "right" of governments and that it is OK that they just "invent" new taxes or increase existing ones just to cover their ever-growing spending but the truth it that taxation is relevantly recent "invention" (at least in its modern form) and in some largest economies (like USA and UK if I'm not mistaken, and until around 100 years ago US Constitution explicitly prohibited income taxes) income taxes were introduced to cover war expenses but they just liked the income so much they decided to hold on to it forever
And most countries' governments just sort of followed the leaders (so every country has similar taxation systems now, the difference is in details only). (the same applies to immigration restrictions and criminalization of migration btw.)
I think we should view governments as no more as service companies who provide security (police, army etc.), conflict resolution facilities (courts of law etc.) etc. and pay them only for services provided (let them invoice us with detailed invoices) instead of %% of our income. Plus as much as possible of govt. functions should be outsourced to free market participants.
Sooner or later something like this should happen, this insanity (uncontrolled US govt. spending and ever-growing EU bureaucracy for example) can not go on forever. And all those modern "welfare states" are not economically sustainable in long term anyway.
Governments should be restricted to providing security for our lives and our private property. Period.
Time to read my post on reinventing democracy with bitcoin technology: http://forum.bitcoin.org/index.php?topic=15967.0
(that thread is for technical/development discussion)