While you're partially right in terms of house property value, high property taxes encourage efficient use of land. They prevent wealthy landowners from just sitting on valuable land.
One other thing I forgot to mention is that the ultra-wealthy typically earn most of their money from investments, not income. This is why Mitt Romney pays a net lower tax rate than you or I and another reason why even progressive income taxes are fairly regressive.
State taxes often treat investment and wage income the same; particularly in California.
Formerly 15% + 0% (if you lived in WA) capital gains one year is now 20% + 3.8% + 14.3% (if you moved to California in 2013). That's a pretty big difference for the same gain.
