A government which only enforces private property rights is still significantly smaller than most alternatives.
Enforcement of private property rights is a part of virtually all governments, and then you pile all other stuff on top of that hence making the government bigger.
And ofc the taxes will be below the profits, no sane person would make any investments in anything if it was above the profits.
Edit: and to add, many hardcore capitalists, like minarchists, libertarians, or anarcho capitalists, propose that you don't even need a government to enforce private property rights. They'd rather solve that issue privately.