Well, as I pointed out, Market can't solve things like Negative Externalities and Tragedy Of The Commons, nor can it do broad Strategy (for example, investing in Education to have a population which in aggregate is more productive) and those things are a lot more than merelly Defense and Polution (for example, Road Safety is a Negative Externality subject and reliable Product Information is a Tragedy Of The Commons one if you consider "trust in sellers" a form of Commons that if exhausted by too much abuse leads every buyer to make their purchase decisions from distrust-as-default, which is reduces trade).

As for lower birth rates, from my own country (Portugal) and having lived all over Europe, I would say the greatest present day problem is not at all taxes (as long as they're actually used to pay for Public Services such as Universal Healthcare, they tend to help the most those who earn the least, such as young adults beginning their careers) but rather house price inflation: people are living their parents' home later, marrying later, getting children later, getting fewer children (because they can't afford a bigger house or the cost of multiple children whilst paying for a bigger mortgage) and even in the case of some countries (like Portugal) leaving the country for places were houses are cheaper as a proportion of Income.

Taxes need to be used better (more in ways that benefit people in general, less as pork and to pay the jobs for "the boys" from the mainstream political parties) and the time-waste burdern of taxation needs to be minimized, but that's a completelly different position from a generic "taxes are bad" - I don't think it's taxes that are bad, I think it's the well entrenched politicians from certain political parties that are bad and hence when in power use taxes badly.