The counterplan doesn’t limit corporate profits, because states will deduct higher state taxes from their federal filings
Sherman 23 (Fraser, “Can a Small Business Deduct State Taxes Paid on Its Federal Return?,” Small Business, https://smallbusiness.chron.com/can-small-business-deduct-state-taxes-paid-its-federal-return-63958.html)
If you own a business, you can deduct at least some of your state taxes as a write-off against your federal taxes. Your chance at a write-off depends on which taxes you pay and the structure of your business. Corporations report their income to the federal government on Form 1120. Sole proprietors use Schedule C, and partners use Schedule E. Income Taxes A corporation can claim whatever state and local income taxes it pays as a federal tax deduction. If you get your business income through a partnership, the same rule applies. Sole proprietors can deduct taxes imposed on gross business income; taxes on net income are deductible only if you itemize on Schedule A. A one-person limited liability company is taxed like a sole proprietorship. If you're in a multi-owner LLC, you pay like a partnership.