This topic can be incorporated with Trump’s Freedom Cities.
Prosperity Districts, as proposed, would combine and
improve on all of the tax and regulatory best practices
found in other countries with a unique new bottom-up
method of zone creation and expansion and an innovative
reliance on an interstate agreement (“compact”) to provide
additional stability and durability. The zones would
be created, not by governments, but by local property
owners on a purely voluntary, unanimous-consent basis.
Zone creation would be authorized under the protective
sponsorship of a state statute, which is currently in the
form of model legislation, but when adopted by the first
state, would immediately trump all other laws within that
state except for federal law and the state’s own constitution.
When a second state adopts the same statute, the
legislation is automatically upgraded into the form of an
interstate compact (known as the “Prosperity States Compact”),
which renders the rights and privileges of zone
inhabitants even more durable. If Congress also assents
to the Prosperity States Compact, then most federal taxes
and regulations are replaced with best practices within
the zones.
Each Prosperity District would function as a largely
autonomous special economic zone, similar to the Reedy
Creek Improvement District that sustains Disney World
in Florida. Even with a large measure of autonomy, certain
rules would still apply: the federal and state constitutions,
basic criminal law, the common law of property and contracts,
and the organic legislation itself, which could be
tailored by each state to preserve certain state- and county-
specific regulatory policies within zones. If states are
the laboratories of democracy, Prosperity Districts would
be the laboratories for free markets and economic growth.
Critics might claim such a system would be subject to
cronyism, corruption, and exploitation of workers. However,
the overwhelming lesson from around the world is
that corruption is less of a problem in well-designed special
economic zones than in traditional jurisdictions, and
especially in those zones with the lowest and most predictable
tax burdens, where the economic rules are the
most liberal and stable, and where public officials have
the least discretion to manipulate markets. In places that
maximize economic freedom and the rule of law, and
minimize arbitrariness in government decision making,
corruption tends to be minimal, because the temptations
to influence public policy for private ends are minimal.
As envisioned, a Prosperity District will be a model of
government transparency. Any corrupting influences will
need to overcome a litany of sunlight provisions, specifically:
- a district’s charter and bylaws must be adopted
in public hearings; 2) except for executive sessions, all of
the board’s proceedings must be conducted in public; 3)
all governing instruments, records, and accounts must be
made public and open for inspection by any person; 4) all
information requests must be answered in a timely and
responsive manner; 5) districts must undergo a full independent
audit once every two years; 6) service contracts
must undergo a performance audit once each year; and 7)
all audits must be made public.
As mentioned, this concept has been “done before,” albeit
in differing forms and to different extents.
From the prosperous and relatively peaceful mining
towns of the California Gold Rush to modern economic
powerhouses like Singapore and Hong Kong, wherever
government has been properly limited, free markets,
peace, and prosperity have naturally followed. The current
Prosperity States Compact proposal builds on these past
and present successes by offering a vision of government
without power to tax, regulate, or confiscate, but which
instead relies on voluntary private agreements and common
law to protect the life and liberty of everyone in the
community.