Your tax less system is similar to the way the Vatican's sovereignty behaves. Instead of "taxes" per say it is museum fees, tourist fees, etc. Essentially taxes is revaluated. If the Vatican could take out the outdated centralized monarchy and replace it with a decentralized open source ecosystem, then we will have what you envision.  

Many comments say how the State will always be corrupt because of people. Well in this day in age, our technology is far advanced that the blockchain system can do it for ourselves. The system(machine) not people will push for our liberation. Literally eliminating the middle component that made it seem that free market couldn't work. But it's Post-Capitalism, not capitalism any more.