> A more important question is how much room to manoeuvre does California have?

That's very hard to say.

> If California increases taxes by 5% to fix the issue how many businesses and highly paid employees will leave?

Even if it was a simple as taxes being a single number where distribution of the taxes doesn't matter, there's no consensus on the average effect of increases. And, in reality the distribution probably matters intensely.

(And, of course, taxes aren't the only lever; maybe California instead radically cuts back on mass incarceration; to the extent that California has less room to maneuver in taxes it has more on spending, which in some ways is better for this purpose—spending cuts tend to also inherently reduce the rate at which the problem is made worse, before you even consider how the savings are applied. Either spending or tax, though, may take ballot action or legislative supermajority, because much of State spending in CA is programmed by Constitution/ballot measure, and tax increases can't be done with a simple legislative majority.)

In some specific cases it's actually quite clear that specific tax increases drove out a large number of high-income earners and were thus a net loss. See for example Rhode Island's Millionaire Exodus: http://theluxuryhub.com/the-tax-factor-in-rhode-islands-exod...

Yes, a few, but those cases aren't really useful for answering quantitative questions about general tax level changes and their effects on tax base, because the only time the effects are even remotely clear (and it's telling that your one example is an article whose lead paragraph says “There could be several reasons for this out-migration, but one possible reason that finds support is estate tax”) tend to be fairly extreme cases of fairly targeted taxes, where there is a clear visible link between the change in policy and the change in behavior.

Not much, I think. It's already about tied with NYC for highest state+local taxes in the nation.

Also, no reason to believe just 5% will fix the issue.