The Wealth of Nations Book V, Chapter 2

Of the Sources of the General or Publick Revenue of the Society

• Believe it or not, not all public expenses come straight from the taxpayer—at least not in Adam Smith's day. Some of it comes from the personal bank account of the king. The king, for example, pulls revenue from all the land he owns, and he uses part of this revenue to make his country nicer.
• But most of the money used for public stuff comes from taxpayers. Now today, you'll get a lot of talk about how high taxes hurt an economy. But Smith believes that some taxes are necessary if we're going to keep things working smoothly.
• It's also important to make taxes really clear and not to be shifty about them from year to year. You can't have the IRS or someone coming up to you and saying, "Uh yeah, how about you give us… ten thousand dollars?" Also, Smith thinks that people should pay tax at whatever point in the year  is most convenient for them.