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In your example there is one error. When he collected money from all and built a powerhouse that everyone who gave money for its construction must receive electricity for free. In our life we sell electricity. It turns out we're paying twice. And the income goes into someone else's pocket.
Only if you're taking it literally. This doesn't have to be a power plant, but a bus service that will take their kids to school every day, a teacher that will teach these kids in a classroom, which is much cheaper than private tutoring, street lamps, pavements, emergency services... All those things are provided and maintained with taxes.
But the question isn't really about 0.0001% of taxes spent on streetlights, it is about the high percentage spent on 'defense', housing marijuana smokers and the mentally ill in prisons, etc.
The solution is a crypto based economy that involves consensus spending, with smarter people individually having an edge to insert occasional checks and balances, rather than gangs of power crazy bureaucrats running amok.
The trillions wasted on nonsense could easily be diverted or redirected to science and space programs that would solve a lot of problems at once. The price would be shifted to mass casualties that would be involved in a space program. A better path.
The concept of taxes existed for centuries and is good. These lights, roads and bridges unfortunately come from the same source - your pocket. Sure we'd all like it to be spent on stuff we need like medical research, but that's a different thing. Some countries like the USA are leaders in wasting money on arms, and some are not, it depends on the government.