Would you want to live in a city with no income, sales or capital gains taxes? Well you can soon move to Honduras and get your chance:
Small government and free-market capitalism are about to get put to the test in Honduras, where the government has agreed to let an investment group build an experimental city with no taxes on income, capital gains or sales.
Proponents say the tiny, as-yet unnamed town will become a Central American beacon of job creation and investment, by combining secure property rights with minimal government interference.
“Once we provide a sound legal system within which to do business, the whole job creation machine – the miracle of capitalism – will get going,” Michael Strong, CEO of the MKG Group, which will build the city and set its laws, told FoxNews.com.
Strong said that the agreement with the Honduran government states that the only tax will be on property.
“Our goal is to be the most economically free entity on Earth,” Strong said.
The only restriction is a requirement to employ a minimum proportion of native Hondurans, which seems a small price to pay for what will otherwise be yet another model example for how free markets promote prosperity.
It’s not exactly like we lack such evidence now. Hong Kong was created as a trade colony and become very prosperous under a free market system that emphasized low taxes, limited regulation and free trade. The Heritage Index of Economic Freedom, led by Hong Kong, is topped by economic success stories.
Granted, I’m not saying the Honduran city is guaranteed to be an economic success. That will depend, among other things, on how soundly they implement their legal system. But if they adhere to the principles of limited government and free markets, prosperity will likely follow. Though there’s always a risk that Honduran politicians see it starting to succeed and try to raid the cookie jar, because if there’s one thing that’s universally true about politicians, it’s that they’ll eventually try grabbing anything and everything within reach of their greedy little hands.
