The California state income tax rate is basically the same as for capital gains. But there is a difference federally. So in some states you would indeed pay a l

The California state income tax rate is basically the same as for capital gains. But there is a difference federally. So in some states you would indeed pay a lower capital gains rate, and because the federal rates are lower on capital gains, Californians do pay lower overall taxes on capital gains than regular income (there are technical words differentiating capital gains from other income, don't remember it right now). I think a rough rule of thumb is that very high earners will pay slightly more than 50% of income of wages on taxes (state and federal) in CA and about 24% of capital gains income on taxes, before various deductions. But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states; making up that difference is partially why other taxes and fees are so much higher in California.