Application of tax policy does not seem like a "market" that local governments should "compete" in. I understand this does happen internationally, between nati

Application of tax policy does not seem like a "market" that local governments should "compete" in. I understand this does happen internationally, between nations. Not that it is a good thing, but seems very difficult to stop. However, at first glance, it seems absurd to me to allow this to occur within a single nation, between the different sub-localities. How does this benefit the US as a whole?