[getsoutalive]

The first developed country that does that will have an almost unfair advantage for attracting productive citizens, new businesses and jobs.

See Estonia. Not exactly a first world utopia, but they have seriously embraced free market principals and are reaping major benefits.

[Zon]

See Estonia. 

Just looked over at infoplease.com and their numbers look good. A real growth rate at 7.4% with 4% inflation. Their unemployment is at 9% and their currency is gaining steadily on the dollar for ten years. It's estimated to have 100% literacy. That seems odd with 9% unemployment.

Not exactly a first world utopia, but they have seriously embraced free market principals and are reaping major benefits.

Twenty-five percent of their roads are paved. They have twice as many cell-phone "lines" as land-phone lines.

They have an income tax and a VAT. Get this: JANUARY 2007 Income Tax
From 1.1.2007 -- the new flat income tax rate for companies and individuals is 22%(2006 rate-23%). The flat rate would be further reduced to 21% in 2008 and 20% from 2009.

They're headed in the right direction regarding income tax.