Unless you're playing in the Tippyverse, the vast majority of games are in a bizarre medieval stasis.
My campaigns tend to be "not quite Tippyverse, but starting to realize the possibilities."
D&D is a mix of medeival styling layered over concepts that are exceedingly modern and combined with stuff that never happened. If I have a magical metropolis in my D&D game, it will generally resemble Chicago of the 1920's more than Florence of the 1400's.
... First off, seriously? The kind of infrastructure required renders it pretty absurd. Second, and really more importantly, why should we care? If you're going to just ignore the pretty obvious and crippling problems with that, why even bring up taxation in the first place?
Ah yes... infrastructure. If only there were people with magic powers and infinite planes of bureaucrats.
This appears to just be a massive "One True Waytm" bait thread.
Yeah, because I totally told everyone somewhere in one of my threads how they're supposed to play. I asked if anyone had done anything interesting with taxation in their campaigns. Some people said "yes." Some people said "no." Some people thought I needed a history lesson. I said I don't need a history lesson because I'm not trying to replicate a specific segment of Europe that might have existed between 1000 and 1800 AD and I, personally, don't think the nature of the game really lends itself to doing so.
I always figured that spellcasters were sort of their own societies, such as wizard's towers which had water-generators and wall of force and otherwise self-sustaining stuff. Every so often they'd trade their magic stuff for political leverage, but wouldn't flood the market so as to dilute their value and usability.
My campaigns generally assume that many Wizards don't want to live the "crazy hermit" lifestyle, and are willing to make certain concessions to be accepted by a society that might otherwise hate and fear them. Also, I run games in (modified) Forgotten Realms, where the Red Wizards have made MagicMart an official thing with competitive pricing. Their shops are also considered sovereign territory, meaning they get to bypass many taxes, tariffs, and regulations.