They don’t have a choice to “tolerate” it or not. America is a completely free market internally, with no legal, language, or cultural barriers to companies moving around. States are perfectly free to offer more attractive terms to companies, and other states can either match those offers, or watch their economies pack up and move to Tennessee, Georgia, Texas, etc.

That said, lack of corporate taxation isn’t to blame for America’s ills. If you compare the US to Germany, Canada, or France, you don’t see those latter countries taxing corporations more. Indeed, the total tax burden is probably less. (Not just the paper rate, but the actual average tax rate after “loopholes”). The French “real” corporate tax rate is almost half of what it is in the US (the on-paper rate is like 1/3 of the US). They also don’t really tax their rich people more. Someone making a million dollars a year would pay similar taxes in New Jersey as in Canada or Germany. A Californian might pay less.

No, the real reason America’s public services are crumbling are (1) we are extraordinarily inefficient; (2) we tax the middle class far less than Canada, Germany, etc.