[rmk]

CA is a first-world country (comparable), whose politics and governance are closer to a third-world populist state (India comes to mind). Insane giveaways and voter-mandated initiatives that take budgetary decisions out of elected representatives' hands (this one is both too much democracy and too little democracy at the same time!)

As far as taxing people effectively is concerned, I do not think there are simple answers to be found. As you yourself know, it's possible to clean dirty money simply by setting up complicated ownership structures in jurisdictions such as Jersey. But that only works for the substantially rich. The large majority of high-earners who are very successful professionals at or near the top of their fields end up shouldering a lot of the burden as far as income taxes are concerned. These people can not afford the advice needed to shelter their assets, so they end up getting caught in every revenue raising scheme.

High sales taxes are a terrible idea. CA taxes sales heavily (no VAT, but very high relative to other states), but it ends up being heavily anti-poor, because most poor are the working poor, and they must spend the majority of their incomes on essentials such as food, shelter and transportation. The sky-high gas taxes and surcharges also affect the poor the most in a similar fashion. If the goal of the taxation system is to be progressive, then sales taxes are the direct opposite of that. As are payroll taxes, for the most part.