Govt needs fund (aka tax) to pay for carrying out the responsibility of govt. And yet these powerful new elites of the society now actively resist paying taxes. They obviously care for their own pockets only but they drag other wannabe riches into the same camp too. In the end the govt loses more and more tax revenue.

A little historical digression. Kings often had trouble keeping merchants and rich nobles in their places. Often the kings lost out, either completely as losing their heads or losing the power and become figure heads. And these kings often seemed to have absolute power and yet they couldn't keep the powerful in the society in check.

And nowadays these corporations lobby the govt and influence the high officials from early on with promise of cushy jobs for them or their kids.

Govts shutting down tax arbitrage? Yes, sounds so easy but it's near impossible because the powerful forces in society are resisting it.