Great post. I loved the first one, which makes total sense.
Monaco is a sort of taxless state (except for the social insurance taxes). But Monaco's *success* relies on the fact that it attracts wealthy tex-evaders (F1 Drivers...) and get some *gifts* from them.

I think that what is missing in your analysis is the answer to the following questions: 
* How to promote art and culture ? 
* How would you manage education and (fundamental) research ?
* How to manage homelessness and unemployment? (welfare)
* Management of private real estate (invention of tier-3 renters)

I'll give you my thoughts so we can have a discussion:
**Point1** is very important because culture is precisely what defines a country. A pure capitalistic approach would probably lead to forms of art whom role would only be to get a ROI *(we already have it today, it's called TV...and it sucks)*.

**Point2** is tricky. The US University education system works on money, and has extremely strong impacts on the economy *(debt, leading to leverage effects, especially under an economic crisis)*.
Fundamental research may not bring immediate ROI, thus would be put aside from the research priorities: The state would miss opportunities and would have to "buy" technologies abroad, leading to high costs for technological innovations (basically, you'd pay the taxes to other countries buy buying tech or importing high-end goods)

**Point3:** what happens when, because of point2 for instance, your country is in a 10-years economic downturn and unemployment raises at dramatic levels ?
How would you control land leasing in order to avoid homelessness, and still bring a good level of income for basic state spendings (Military for instance)

**Point4:** How would you manage the fact that people would probably create businesses with the land: creating a shortage of land in areas, making the market prices climb and making a profit out of it *(I live near San Francisco... real estate is crazy)*.


###Thanks for your insights. GREAT GREAT reading.
*(Can't wait for part 3 !)*

@sebastien