[velcro]

Agreed. Smaller nations/states almost have to do that to remain competitive.

Especially the newer EU member states that have been experiencing an incredible amount of brain-drain i.e. people moving to bigger/"richer" countries. Bigger countries profit from that while smaller die out - unless they make themselves more attractive somehow. To some extent its happening within bigger countries as well with urbanisation - in Germany for example villages that are not close to bigger urban centres have the same problem.

Whether you call it a "tax haven" or subsidising - in practice its virtually the same thing. Of course you need some rules in place to prevent creative tax practices by multinationals (like linking taxation to physical presence) - but its a do or die sort of thing.