Money is a medium for exchange that a group of people agree can denote transactions. Gold itself is not a currency, it is a commodity. The government had to mint gold coins to increase the difficulty of counterfeiting and to insure purity. Taxes, fees, etc. were paid in government minted gold coins, not gold bullion.

Early currency did include gold, but also rocks and shells, which are objects with no intrinsic value beyond their difficulty to counterfeit. I would argue the same is true of gold. Currency holds value only because it effectively denotes transactions and is difficult to counterfeit; hence the value of Bitcoin.

Taxes do not pay for government spending; the Federal Reserve issues currency. Both taxation and currency issuance exist to regulate the flow of money. Even in the era of gold, taxation was not so much about funding public works, but about the government managing the monetary flow. This was especially true when there was no independent central bank like the Federal Reserve.