Well, I'd at least have some respect for the Republican party if they were the Republican party of old that really did believe in small government. However, they believe in welfare just as much as the Democrats do; except that their welfare goes directly to super-rich corporations who cannot handle their finances correctly (or really do, but hide the money anyway). If they took the strong stance against the people who pay for their electoral victories as they do the poor, then maybe I wouldn't have the urge to gag everytime they talk about "small government".
In addition to a strong defense, I think the government should subsidize education. Many people in the past have been able to acheive the "American Dream" despite their less than wealthy backgrounds because of the availabilty of government susidized free public schools and low cost secondary education. Hell, I'm one of those persons, and once I'm through with college I personally will have no problem in giving my tax money to help further this cause. Despite some well-documented short comings in the public school systems (especially the inner city types of which I was a part of), not only has government subsidized education been more positive than negative overall, but one might argue that an educated populace is just as much of a "compelling government interest" as having a strong national defense.
I'm also for universal healthcare (which will probably get me in trouble in an otherwise Libertarian thread ). Perhaps a relatively cheap one like the one proposed by Howard Dean, but as long as it ensures that every citizen has access to quality health care. Our tax situation would obviously be a lot better if a great deal of government spending on other areas were cut ( like the aforementioned corporate welfare. Just a very small sampling here: http://www.progress.org/2003/tcs140.htm ).
So even with basic things like education, healthcare and social security, our taxes could still be cut by a great deal if we spent less on programs that conservatives never seem to talk about. Those welfare programs for the rich take up way more money than the stuff we throw at the poor (which I do largely agree need to be fixed as well. Clinton's welfare reform was a very good step).
Since the government in reality is the "the people" (and not necessarily an evil monolith with a mind of its own ), the question really is what do we owe ourselves?