Collect the taxes in bitcoin? Why would it be much different. They don't directly pay for public works with printed money anyway. The printed money is lent out to banks mostly.

I think income taxes make up the majority of the tax base. Corporate tax base over all is surprisingly small from what I understand. Although it's not that surprising when you consider all the tax cuts that have been given to corporations over the years. And not to mention how good these corporate accountants are at bending the rules so these companies end up paying low single digit tax rates.

People will still pay taxes when faced with the alternative of jail time. There will be a large underground economy, or shadow economy as some people call it. But the state will always make sure to collect its taxes one way or the other.