I'm going to toss another wrinkle into this discussion, one that was briefly mentioned on page 2 but not fleshed out enough IMO. That issue is the question of which level of government should be setting economic policy and doing the spending, and on what.
In other words, why do we have so much of our spending/economic policy/taxation originate on a federal level? When I look at education, infrastructure, law enforcement, urban planning, social welfare, etc, the vast majority of them would be better handled on a more local level. For example, my village wants to widen 4.5 miles of road (2 lanes ->4) and add roundabouts at a half dozen locations. The projected cost is $50 million. That's a lot of money for a village of 30,000 to raise. But it's no problem, because Uncle Sam is going to pay for a bunch of it!
If instead the village had to finance the project entirely on their own, they'd be forced to reconsider what they actually need to build. Instead of paving 4 lanes for the entire distance, they'd probably realize "hey, two lanes is actually enough, it's just at intersections that it becomes a problem." Or, instead of building a massive 100-foot-wide corridor (8' bike path, grass strip, 4' paved shoulder, 2x 11' lanes, 18' median, 2x 11' lanes, 4' shoulder, grass strip, 4' sidewalk, plus more right-of-way on either side), they'd be forced to only build what is needed. But since they're expecting the lion's share to be paid by the Federal government, there doesn't appear to be much appetite for restraint.
In short, it's a lot easier to accept higher taxes (of any sort on anyone) when they're being spent efficiently, and with greater accountability to the folks paying the taxes. And that's more likely to happen the more local the taxing and spending happens.