Your premise of considering “Europe to be a colleciton of states” is false. You do not “get [a] much clearer picture.” Europe is a collection of countries. They cooperate on many things, but the level of cooperation is no where near the level of that between US states. Your premise is like saying, “if you consider the US and Canada (or US and Mexico) to be a collection of states.” Of course you wouldn’t do that. Windsor Canada and Detroit Michigan are like Kansas City, Missiouri and Kansas City, Kansas as far as distance goes, just like Brownsville, Texas and Matamoros, Mexico. But you would be just as incorrect to assume that good sold in Windsor can just be shuttled across to Detroit the same way as from KC, MO to KC, KS.

There is one IRS covering the US for taxes. There is not one IRS for the EU. Every country has it’s own, and most all of them are in a different language.