The Anarcho-Capitalism of Murray Rothbard does not recognize the legitimacy of taxation even to fund police protection. John Stuart Mill has a broader view of what a state can legitimately do. In On Liberty, Chapter IV, “Of the Limits to the Authority of Society over the Individual” paragraphs 1-3, he writes:
What, then, is the rightful limit to the sovereignty of the individual over himself? Where does the authority of society begin? How much of human life should be assigned to individuality, and how much to society?
Each will receive its proper share, if each has that which more particularly concerns it. To individuality should belong the part of life in which it is chiefly the individual that is interested; to society, the part which chiefly interests society.
Though society is not founded on a contract, and though no good purpose is answered by inventing a contract in order to deduce social obligations from it, every one who receives the protection of society owes a return for the benefit, and the fact of living in society renders it indispensable that each should be bound to observe a certain line of conduct towards the rest. This conduct consists first, in not injuring the interests of one another; or rather certain interests, which, either by express legal provision or by tacit understanding, ought to be considered as rights; and secondly, in each person’s bearing his share (to be fixed on some equitable principle) of the labours and sacrifices incurred for defending the society or its members from injury and molestation. These conditions society is justified in enforcing at all costs to those who endeavour to withhold fulfilment. Nor is this all that society may do. The acts of an individual may be hurtful to others, or wanting in due consideration for their welfare, without going the length of violating any of their constituted rights. The offender may then be justly punished by opinion, though not by law.
John’s argument that “every one who receives the protection of society owes a return for the benefit” is one that Elizabeth Warren has been echoing to argue for the legitimacy of taxation to support a wide range of government activities. E. J. Dionne’s review of her book A Fighting Chance in the Washington Post offers these quotations from the book:
1. “There is nobody in this country who got rich on his own,” she said. “Nobody. You built a factory out there? Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for.” …
2. “There’s nothing pro-business about crumbling roads and bridges or a power grid that can’t keep up,” she writes. “There’s nothing pro-business about cutting back on scientific research at a time when our businesses need innovation more than ever. There’s nothing pro-business about chopping education opportunities when workers need better training.”
Although her specific examples of government action in these quotations sound fairly benign, the way Elizabeth is using the argument that "every one who receives the protection of society owes a return for the benefit" does not provide any obvious principle for putting a bound on what the government can legitimately raise taxes for. I suspect that, if magically revived in the modern world, John Stuart Mill would argue for a more limited government than the one Elizabeth Warren advocates. (And it is clear from the passage in On Liberty quoted above that he would not go along with her invocation of a “social contract.”)