[crusso]

Hence my question. So now if you allow industry-specific taxation, then you just craft a special bill that cuts taxes for large airplane manufacturers and Boeing gets a tax cut.

Boeing has a lot to offer a state. They could put their production in lots of places, including in other countries. If a state finds value in having Boeing there, there's nothing wrong with incentivizing them to go there.

If smaller businesses find that the state is hostile to them for one reason or another - maybe because they feel overtaxed because of big breaks for the big companies, then smaller businesses will not do as well in that state and will tend to migrate elsewhere. Then the state might need to rethink its tax policy like New York has been doing with its reduced rates for new businesses.

At the end of the day, we don't need the Federal government micro-managing the states. The USA wasn't formed that way and it would be yet another Federal overreach that would create backlash and perverse incentives. You mentioned the EU. The EU is dealing with that sort of backlash now with Brexit and other referenda. Overreach by central governments is a proven route to tyranny.