I would disagree. Immense amounts of effort are expended in Silicon Valley to shelter income and assets in Nevada. Where the Federal brackets fall now for income and capital gains is probably right around the maximum and perhaps a little high. When states like California tack another 10% on top of that, people start to look for tax dodges. People who are perfectly sheltered in Nevada, on the other hand, seem to be far less concerned with the amount of tax they pay. Personally, I find the California tax system egregious, but I can work with the Federal system, no matter how much I detest it. The dozens of well-off friends I have in Silicon Valley agree with me, almost all of whom are sheltered to one extent or another in Nevada. Nevada, in its wisdom, has chosen to reap the benefits of Silicon Valley money indirectly rather than through punitive taxation. As long as California continues its hideous tax system, it will lose revenue through the wholesale sheltering of assets and income in Nevada.
If I had to pull a number out of the air for the maximum aggregate tax rate that will not evoke massive sheltering, it would be around 20-30%. Anything more than this and people will start doing things with their money that will eliminate revenue for the government. And rightly so.
BTW, you may substitute "Wisconsin" for "California" in your quote. At this time, WIs D of Rev is suing a well-known Wisconsin based retail chain for $800K in tax, penalty, and interest, for establishing an asset-rich income-earning operation in Nevada to which the Wisconsin company sends all its Wisconsin earnings in payment for 'trademark rights.'
The dodge was put together by Deloitte at a cost of around $600K and INFURIATES the rapacious Wisconsin tax men.