(1) "citizen's life" = the life of one person
In this case you need to say " a citizen's daily life", with "a"
(2) "citizens' lives" = the lives of many people, talking generally
In this case, no preposition.
I think you mean to say sentence (2), and this sounds more natural English.
Also note:
"income taxes" not "the income of taxes" (and you could simply say "taxes", doesn't really matter which one)