What's to stop states from increasing the amount they compete with each other to lure businesses by reducing regulations, lower taxes, etc

I think this is a loop that hurts regular people.

Less regulation could open people to more risk and less ways to combat it.

Lower taxes for businesses means that state funding must be made up with either cuts to services or higher taxes on people.

I think Republicans will use these incentives and the federal government's power to push all the money to red states causing economic decline in blue states which they can then blame on the leaders of those states.

I know this already happens but now that Trump is open to blackmailing states with funding because they aren't run by Republicans it will get worse