People with fixed incomes, people retiring, people cashing out their home equity and relocating to a place where it will go further, people with low incomes whose earnings will drop less than their cost of living if they relocate, are all incentivized to move elsewhere.

Contrawise, people moving into the state are probably high income in the first place – they’re either capitalizing on new wealth to relocate to a more pleasant place to live, or accepting a high income position in the technology or entertainment industry, etc.

I can guarantee you, as well, that someone making a million dollars, usually via capital gains, etc., is not focused on avoiding income taxes, until and unless they’ve actually made the money – at which point, the taxes are dealt with after the fact, and are just part of the cost of cashing in.

As well, income is still generally tied to geography, and there are damned few places you can make a million the way you can in Silicon Valley or Hollywood. If you don’t make the money first, you can’t pay the taxes.

In addition, the increaes in CA’s population is mostly from immigration (legal and illegal), and the babies of those immigrants. Those folks tend to be poor. Meanwhile, there is a net outflow of residents. By 144,000 in 2008.

http://news.yahoo.com/s/ap/20090112/ap_on_re_us/fleeing_california_3