This is definitively wrong because taxes change the optimal level of private resource engagement in an amount that is not fixed to by the amount of tax collected. Lets say you add a 10% tax on paper. That 10% tax is unlikely to reduce paper usage by exactly 10%. If it reduces paper use by less than 10%, then you are raising more revenue, ie destroying more reserves, and thus offsetting purchasing power that could be used elsewhere(whether it would be used is arguable). If it reduces paper use by more than 10%, then you have more real fiscal space. Only in the case that resource use is decreased exactly 10% by the 10% tax, does the “tax fund the spending”.

The significant argument that you are missing, is that there is a huge amount of “slack” in economies, that could be used by fiscal authorities without negative repercussions. Essentially, think of this as unallocated memory on a computer system. If the operating system needs it and it is unused, there is not a significant penalty to appropriating it. If however, you need to start using swap space, it gets pretty dicey.