California's high income tax are bad, but not because they take too much income (that's a separate argument about the morality of taxing labor vs wealth). The income taxes are bad because when the labor market implodes the tax base dries up. At least there's a well-funded "rainy day" account now. But in the Great Recession state finances were quite a mess, which meant the services everyone relied on got cut. So essentially there was a one two punch of job losses and less services for the unemployeed to use.