Taxes cannot provide services at a lower cost than the free market. Let me illustrate this with a simple example. Please note that this is just a basic math illustration and does not account for opportunity costs or the theory of subjective value, but it works well as a straightforward figure.
Imagine you are the government. You tax two people, taking $1 from each, giving you a total of $2.
Because you do not work for free, you take 50 cents of each dollar collected as your administrative wage.
You then go to the market to purchase a service, leaving you with $1 to provide that service for your two citizens.
As a result, you can only afford a service valued at 50 cents per person.
In a world without you as the government, those same two individuals would each have their full $1 to buy the exact same service independently.
