I just thought of an answer to the question of "where does our alleged government get its money from" that allows for the possibility of a world free from taxation. If we presume that the Gym leaders are municipal rulers, then it seems reasonable to assume that any money won from trainers who challenged the Gym and failed could be used as a source of income for the municipality. It would make sense for the Gym leaders to fund things like free Pokemon Center visits, since making health care for Pokemon free encourages more trainer activity, leading to more Gym challenges, and in turn more revenue. Things like roads could be seen as means to the same end, especially roads connecting two highly-populated cities like Celadon and Saffron. Also, one other thing: it seems likely that all entrances to Saffron City are toll booths. The guards don't allow the player character to pass until you bribe them with some drinks. It's not stated that they're toll booths, but I think it's a reasonable inference, even though the guard's stated reason for not allowing you to pass before you bribe him is that "the road's closed."