He did not propose revenue taxation.. Such an abomination didn't even exist at that time. The only tax he expressed a favorable view of is a land tax, which is at the opposite end of the spectrum from income taxation with respect to invasiveness and violation of private property rights.

Him supporting revenue taxation would totally conflict with a sentiment like this which he expressed:

To subject every private family to the odious visits and examination of the tax-gatherers ... would be altogether inconsistent with liberty.

The visits are now replaced with the onerous requirement to keep records of all private financial transactions one engages in all year, and produce them on demand if the taxing authority should request them, and to detail to the taxing authority all the income one has earned from any private trade, even barter, and hand over a sizeable share of the value received in the totality of that trade.

I'm not sure how you're reading this quote as anything other than that: "that is, in proportion to the revenue which they respectively enjoy under the protection of the state." "

There are plenty of ways that a tax can raise an amount from individuals that is proportional to the revenue which they enjoy under the protection of the state besides an income tax. Basically any tax on any broadly consumed commodity will do that, because its consumption will be proportional to overall-consumption, and by extension, revenue.

An income tax did not exist in Smith's time, and had it been proposed in that period, it's extremely unlikely he would have favored it given 1. his admonishments against expansive government that intrudes upon the private lives of citizens, and 2. the need for an expansive tax enforcement apparatus, that invades the inner sanctums of the private lives of citizens, to enforce an income tax.