there might be a trade-off among enforcing holders to participate in decreasing the block-chain length and block-size.
You're not helping in decreasing the blockchain size. As already said, holders can just re-create the same outputs. The only thing you enforce is people making more transactions to avoid your fee. So, you're actually disincentivizing transaction compression.
Taxation is not a bad thing if spend in its true ways. spending taxes out of the taxed system is harmful but investing taxes on infrastructure of the taxed system always improves and creates value.
You're probably surrounded by people who share a different perspective, myself included. Taxes are often times obstacles from innovative thinking and creation of value in the free market.