Free rider problem. Google would get some benefit from it's local governments being more effective, but it would also pay a cost. Meanwhile, it's competitors keep high margins, and don't pay anything.
Say California closes tax loopholes. Then all California companies are placed on an equal footing. But they're now at a disadvantage to non-California companies that don't pay taxes.
Usually higher/simpler taxes will be the better solution. The higher the level they're applied at, the better, as far as the companies are concerned.
Recall that Amazon has been pushing for Federal rules on state sales taxes. Absent those, it's been simpler for amazon to fight paying taxes rather than set up a compliance system and pay taxes on a state by state basis.
Say California closes tax loopholes. Then all California companies are placed on an equal footing. But they're now at a disadvantage to non-California companies that don't pay taxes.
Usually higher/simpler taxes will be the better solution. The higher the level they're applied at, the better, as far as the companies are concerned.
Recall that Amazon has been pushing for Federal rules on state sales taxes. Absent those, it's been simpler for amazon to fight paying taxes rather than set up a compliance system and pay taxes on a state by state basis.