Try to guess the eighteenth century author(s) of the two following passages (you can cheat by using Google, of course, but I'll reveal the answer(s) if you keep reading):
[A] Society in every state is a blessing, but government even in its best state is but a necessary evil in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamities is heightened by reflecting that we furnish the means by which we suffer! Government, like dress, is the badge of lost innocence; the palaces of kings are built on the ruins of the bowers of paradise.
Okay, and now guess the author of this passage, published in the same year (1776):
[B] Every tax, however, is to the person who pays it a badge, not of slavery, but of liberty. It denotes that he is subject to government, indeed, but that, as he has some property, he cannot himself be the property of a master.
And now this passage:
[C] Thus necessity, like a gravitating power, would soon form our newly arrived emigrants into society, the reciprocal blessings of which, would supersede, and render the obligations of law and government unnecessary while they remained perfectly just to each other; but as nothing but heaven is impregnable to vice, it will unavoidably happen, that in proportion as they surmount the first difficulties of emigration, which bound them together in a common cause, they will begin to relax in their duty and attachment to each other; and this remissness, will point out the necessity, of establishing some form of government to supply the defect of moral virtue.
Finally guess the author of this passage:
[D] The natural price, therefore, is, as it were, the central price, to which the prices of all commodities are continually gravitating. Different accidents may sometimes keep them suspended a good deal above it, and sometimes force them down even somewhat below it. But whatever may be the obstacles which hinder them from settling in this center of repose and continuance, they are constantly tending towards it
Perhaps, you guessed Adam Smith and Tom Paine (given the post-title). You would have guessed correctly, especially, if you realized that [A] and [C] are by Paine (Common Sense) and [B] is by Smith (Wealth of Nations), and so is [D].
As I have argued before, in [B] according to Smith taxation, even the noxious poll-tax, exhibits the fact that taxpayers are free people--not a trivial matter because in context he is discussing the fate of the American colonies where slavery is common.* Smith claims that when 'we pay taxes, we recognize that the size of and the right to our property is the product of our shared activities (that is, the division of labor, and the rule of law). Even when we enjoy perfect liberty (that is we can switch occupations freely), we are subject to government. So none of us can claim an inviolable, absolute right to all of it. One can see in this, as Steve Darwall has urged on me, a reflective endorsement from the perspective of having an equal authority to make claims and demands on one another at all. (See here for a fuller argument.)
Smith knew that by the time (1776) he published Wealth of Nations, his position -- reconciliation between Britain and the Colonies and a widening of the franchise such as to include many (white and male) Colonists [that is a more Democratic British empire] -- was already a lost cause. Paine's Common Sense (which was published earlier in the year) made clear that after the start of hostilities, there would be little space for reconciliation.
Paine, whose name is often omitted when folk write the history of civic society from Ferguson to Hegel, clearly sees government as a necessary evil which is an inevitable (Smith and Paine use 'necessary' in the same way to refer to a certain form of historical causation) consequence of the fact that we are fallen beings (recall the 'lost innocence'), that is, no society of sages can exist. (He does not think all societies will form governments.) From our contemporary perspective, in 1776 Paine is far more 'Libertarian' than Smith; for Paine the purpose of American government is, in addition, to protect us from other citizens, to facilitate trade ("Our plan is commerce.") In fact, it is not impossible that Smith's The Theory of Moral Sentiments (1759) is one of the the targets of Paine; there Smith agrees that protection and trade are the minimal goals of Government, but Smith reaches, as I learned from Ryan Hanley, for something higher from government: flourishing, friendship, and love (recall this post). I am unfamiliar with any evidence that Smith knew of Paine when he was drafting Wealth of Nations, but we know that he delayed publishing Wealth of Nations in order to address the American 'troubles.'
In Common Sense, Paine clearly thinks that a badly formed government can be worse than the state of nature. This is why Paine resists the tendency to treat government as either itself a joint moral project or a fulfillment of human nature: "Society is produced by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions." We are made whole by society, not by government. This can be easily overlooked by those who notice that Paine re-activates the rhetoric of (Civic) Republicanism. For, Common Sense is, in fact, an extended argument that Republican virtue cannot be counted on to secure what it claims for itself even under relatively solid conditions (e.g., in the United Kingdom).
*Paine and Smith are both fierce critics of European imperialism (although in Paine's case clearly less critical of European colonialism). Paine is silent on the evils of slavery in Common Sense, and treats "Indians and Negroes" as enemies of American independence there. But he had already published African Slavery in America in which he calls for abolition. Smith, too, was a fierce critic of slavery (recall), although not as thorough as Paine. Paine eventually became a self-styled "friend of the Indians." Smith, who may have been influenced by Rousseau's image of noble savage, had a tendency to romanticize the American Indians in complicated ways.