But then when it's starts becoming outrageous and overbearing, everyone would certainly want to evade it.
THis is the issue, isn't it? I think even if all government activity was fully transparent and publicly auditable (at least from the financial perspective), it would improve things - but no government will agree to that - even though they are employed directly by the people they hide the information from. Funny, eh?
If you think about how AMMs and yields work, it is all based on smart contracts - why can't tax be the same?