And yet it remains one of the top destination for start-ups. Which indicates that getting rid of taxes and regulation (which states/countries do to get more business) can bring business in the short-term (companies forming subsidiaries and channelling business) but doesn't help the economy in the long term. If you have the right environment for companies to form, higher taxes don't destroy that. Sweden also appears to be a good example, high taxes and stricter regulation (partly through the EU) and still a very active start-up scene.