Except, it doesn't have to work like this. If a nation is being exploited via loopholes of some sort, she has the freedom to close those loopholes. An increase in small personal nations would necessitate a change in policy (mostly around taxes), but would not be disastrous.
Aside from taxes, most other laws exist to prevent one harming another. If someone goes to an island in the ocean, why ought we to care what he does there? To put it differently: many cities have regulations against shooting off fireworks due to safety concerns. Few rural counties do, because while people can still harm themselves, there aren't too many others nearby to injure.
>many cities have regulations against shooting off fireworks due to safety concerns. Few rural counties do, because while people can still harm themselves, there aren't too many others nearby to injure.
Many rural counties have them as well. In fact entire states have rules against fireworks.
Outside of places where wildfires are likely, firework ordinances are often there to prevent the people who are shooting the fireworks from hurting themselves.
>If someone goes to an island in the ocean, why ought we to care what he does there?
In an extreme case lets say a billionaire starts his own island nation, convinces people to move there to work for him, and eventually enslaves his workers and their children. This isn't an unlikely scenario--look at guest workers from SE Asia in the Middle East. What starts off as voluntary can quickly become involuntary.
We have enough powerful people in the world with no checks on their authority. We don't need to create more.
From a more practical concern, what's the upside to existing countries? The new island nation will only admit productive people, and will likely try to ship unproductive people back to their country of origin.
They want independence from the US, but they won't survive in open waters without the US warships. Otherwise, if this island has any value at all, it'll attract Mexican cartels or Russian mafia or whatever else is floating in the international waters these days.
Aside from taxes, most other laws exist to prevent one harming another. If someone goes to an island in the ocean, why ought we to care what he does there? To put it differently: many cities have regulations against shooting off fireworks due to safety concerns. Few rural counties do, because while people can still harm themselves, there aren't too many others nearby to injure.