In a nutshell, that tax competition between US States doesn\’t lead to all that many extant businesses moving means that tax competition is bad, M\’Kay?
Nowhere do either of them manage to grasp the important point, that the economy is not a zero sum game. There is not some pre-ordained number of businesses which State are in competition to host. Nor are we limited to competing to host only those businesses that are extant.
In fact, probably the most important number of all is net business creation. Competition for those might be had through tax competition (indeed, clearly is).
We can go even further. I think the median age at death of a business is something like 4 years (for we are endlessly told that 50% of businesses go bust, close down or fold in some manner by their fourth birthday): so the nett business formation numbers are important, yes, but the gross business formation number is going to be, in any one year, a reasonable percentage of the total business stock.
Anyone want to look up the gross (or nett) business formation numbers for Nevada and California (adjusted for population, of course)?
I think we might find at least a correlation between low corporate tax rates and business formation. I.e. that tax competition does have a beneficial effect.