A possible solution to the "raising taxes on corporation will drive them to other jurisdictions" problem is to make the taxes the same everywhere, at least within the same country, ideally at the world's level, for a truly level playing field. Another would be to say "we prevent you from doing business here if you don't do something here" (the india / china strategy).
Yes, try remove the arbitrage opportunity. That should help. Usually one would say competition is good, so different states with different tax laws is good. However, in many cases it is the workers and small communities that end up suffering as result.
