But surely, in a 'closed system', they have to make up the difference between tax credits and actual cash outlay somewhere? Bargaining on tax seems inherently u

But surely, in a 'closed system', they have to make up the difference between tax credits and actual cash outlay somewhere? Bargaining on tax seems inherently unfair, but inevitable when there is no harmonization between states. (This is one reason the European Union has laws on state aid.)