But besides selling penguins on the black market, there really isn't anyway to have a modern country located there :/ I am thinking that when/if I am a successful businessman, a good choice would be a several thousand acre Canadian island a few hours from Seattle, WA, USA. There would be fishing, logging, farming (to a point, probably not for export unless we sell organic type stuff :/) and tourism, along with web services (there's more people than you would think who will pay for secure offshore hosting in a stable neutral country, it's like the Swiss bank accounts of the web)
As for the government, since the country will not be broken up into territories, and there will probably only be one city (a port with an airport) there will be a a kingly type figurehead, with some power, but most will be in a small body of 11 or so (no more than 15) people. The Us has a huge amount of politicians and such, and it helps no one. It is just more people to argue over things.
Depending on the size of the country, there may or may not be full size cars, more likely motorcycles or something will be the main form of transportation (a few thousand acres is not that big really, but quite enough for a small mostly self sufficient country)
Immigration will be limited, and applicants will have to go through a basic screening. Laws will be made in a modern manner, not tied to decades old standards that are out of date.
It will be a neutral country, trading with just about anyone who wants to, but trade with certain countries may be restricted (being governed by the Us through trade is something to avoid, don't want to get too involved/dependent) As for the military, there will be a token force at all times (if the population was 2k, then perhaps 50 full time people), by volunteering only, with a single branch controlling it all.
I intend to plan out a public transportation system to best any in the world, saving energy and saving space that would otherwise be used for cars full of one person :/
Building would be heavily restricted in most zones, due to that fact that space is extremely limited, so underground and skyscraper type buildings will be preferred (meh, we could have 3, one for all the government stuff and such, and 2 for the rest of the populance to live in.) There would also be codes in lace to make sure the buildings are up to snuff and such.
As for taxes (that touchy subject) they'll depend, I don't intend to pay people in politics huge sums like they are paid in the US, but money will be needed to finance public projects, and my personal fortune can only go so far :/ Money will also be needed for a rainy day fund, and for financing another island to expand too, I intend to buy an island close to other large islands, so I can buy them when needed.
School will be different from most systems, with public schooling being held to high standards, small classroom sizes, and will be shorter than most school systems, starting at six and ending at 16, with college/uni optional (there will have to be good study abroad options) as there probably wouldn't be enough people to warrant more than one college.
Schooling would be general until 14, with the last 2 years being vocational type stuff, courses you choose depending on what you are interested in doing.
More to come?
I think I should make a blog with this stuff on it, to keep it organized, anyone know ruby that wants to help program a simple flat text blogging engine?
Edit: This mexican island might work
http://www.goin2travel.com/islands.htm Seems a bit hilly and arid though, but the size and price are good