I oppose taxation because I oppose the initiation of force in human relations and I make no exception for the state. I accept that individual citizens delegate the protection of their rights to the state but I do not accept that the state ever needs to initiate the use of force to carry out this role as the protector of rights*. Taxation requires the state to threaten and use violence against citizens who have no intention of committing violence themselves - and without the threat and use of arrest and imprisonment, the tax system would fall apart.
I often ask people who argue in support of taxation why, if they believe it is fair and moral, does it need to be backed with the threat of violence? They usually reply that while they would be prepared to voluntarily contribute to social goods, no one else would. That is, of course, a pretty misanthropic view of the world (and, in my experience, a fairly typical attitude amongst those who profess to be altruistic).
So how would we fund the state without taxation? The alternative is a system of voluntary contributions, similar to that in Ancient Greece, which they called liturgy (the use of the term in church services came from the fact that it was at these services that parishioners made voluntary contributions). The liturgical system worked well, funding the great buildings, institutions, festivals and even wars of the Athenian state. It was highly progressive, with the burden falling more heavily on the richest in society than in any modern state. A strong sense of public obligation amongst the wealthy, and a clever mechanism called antidosis, ensured that few escaped paying their fair share.
The world is becoming a less violent, more rights-respecting place and the apogee of this trend is a society that rejects the initiation of force in all human interactions. I believe there will come a time when involuntary taxation is considered to be a type of slavery and no longer a necessary part of human society. That will be a very great day for human dignity.
* Note that I do not consider action to prevent the imminent use of violence, such as a policeman arresting someone who is about to stab you, to be the initiation of force.