After a surprisingly rapid debate at the recent G22 Summit in Shanghai, member states unanimously supported a proposal to eliminate all personal income tax from 2018. A higher consumption tax, or VAT, will replace income tax.

Ever since the Credit Crunch of 2008, governments have struggled to fund ballooning stimulus packages.

Initially, income and special punitive taxes were raised in vain attempts to balance the books, but collections have been costly and ineffective. The burden on individual and corporate taxpayers to minimize their tax liability increased dramatically – even changing countries seemed an attractive option to some.

Confidence in governments eroded alarmingly. Only a radical step change in thinking could save leading economies and their political masters.

Never before have states been able to win such rapid support for a major decision – but the threat of another financial meltdown assured a quick consensus. Even China, with its still-growing tax base, supports the proposal. This effectively will put all 22 countries on a more balanced tax system.

Collaborative advantage will take on a new meaning as countries create new opportunities for investors. Capital could flow more easily and especially to those regions offering strong growth potential. Higher consumption-derived revenue will fill government coffers relatively cheaply and efficiently.

Dan Counter, President of the Tax Practitioners Association, is unhappy – his global membership base faces a severe threat of irrelevance.

Entrepreneurs however are flourishing – creating jobs and growing wealth are easier.

In this age of openness and transparency, it has become fashionable to report all one’s earnings without fear of over zealous revenue collectors. Thousands of administrators and trust officers in island tax havens face retrenchment. Only the most skeptical scrooges still hide behind the murky avenues of tiered ownership structures.

President Barack Obama has cleverly delayed his support for a universal VAT until the end of his second term. He knows it will be unpopular, but it’s the only way to fill the trillion-dollar deficit hole, and keep his promise not to raise taxes for most households.