"Everyone is already doing that, which is exactly the problem."
I'm not seeing that. I'm seeing concentration and not social equity focused distribution.
"You tax everyone and use the collected money to subsidize a limited number of cities with unrealized potential."
There are already cities with untapped opportunities. In my opinion the reason rhey remain untapped is because leaders don't care. They'd rather follow group-think.
If you want to fight the market, you need centralization. You tax everyone and use the collected money to subsidize a limited number of cities with unrealized potential. Selecting the winners is essential. The more evenly you spread the money, the less effect it will have.