Countries do it too. Looking at you, Ireland.

It's not toxic. Competition is the only factor that makes things better, or at least stops them getting worse.

I think the competition argument is stronger when considering competition between states. What seems more towards the toxic side is when within a state some businesses get tax breaks and others don't based on lobbying effort and not based on some broader policy that is neutral towards specific businesses.

I agree with that, but it's difficult to say what cities should or shouldn't be able to enact. They do have different requirements to their region, and you wouldn't want e.g. a minimum wage law that might be appropriate for a city to destroy employability in the rest of the state.

Simple - bespoke deals. You cant jusy offer a deal to Microsoft for example, you have tk offer the same deal/tax breaks to everyone who writes software.

If Microsoft doesnt need to pay taxes, then I shouldn't have to either. Or we all pay.

Its at every level of government. Suburbs fighting other suburbs to give a huge tax break to a potential office where the workers have the off chance of spending some sales taxes buying a cup of coffee in the city. Usually the workers don’t even live in the suburb where they work so they aren’t paying into all those larger tax pools, merely being a burden on the road system. Then when the tax break starts to expire the company extorts the government to maintain it or they simply leave.