In a world with no tax incentives, the determining factor for a large company is access to potential workforce. Therefore companies will move to places where o

In a world with no tax incentives, the determining factor for a large company is access to potential workforce. Therefore companies will move to places where other large successful companies are already, because ultimately you want to recruit from them. This creates a few really big winners, and a lot of losers. In practice, even metro areas with a couple million people are not desirable enough, and lose population. There are many cities that will be willing to offer more just to avoid depopulation. Midwestern metro areas are not going to be happy if there was a federal law that, for all intents and purposes, guaranteed that they were going to shrink, shrivel and eventually die. They have the right to fight for their community's existence with economic means: The "best" you could get is, instead of the government doing it, a private consortium of businesspeople doing the same thing with their own pockets, producing the same effect. The one difference only comes when you start from the dubious position that all government actions distort, while a trade association's never do. Would the economy overall be better if San Francisco had 10 times its current population and we all moved there? In the short term, probably yes, but imagine what even larger differences in state population would do to politics.