You're forgetting that what we [should] optimize for is the general welfare of the population (based on human moral code). Taxes are just one way to redistribute [some] gains that are lopsidedly awarded by the market, since in certain cases we do not want winner-take-all behavior (but instead to optimize the welfare of the many).

This is a middle ground between communism and capitalism and seems to be what works best in practice. Or you could call it market socialism (though that's leaning more into socialist direction).

Unregulated, un-taxed markets do not do that. They support exploitation and extraction (at the extremes).