I’m high income in CA. CA has the highest state taxes. Just to give ball parks, regular investment income is charged at 37% fed + 13.3% state + 1% CA high income + 3.8% NIIT = as high as 55.1%.
For a couple of years I held large cash in HYSA. Then discovered and moved to SGOV to reduce state taxes. But there are also the likes of MUNIs like VCLAX and CMA that are both state and fed tax exempt.
The only downside I can see to CA MuNIs is the lack of diversification as being concentrated in state investments only.
What else am I missing? Would you rather do VCLAX/CMA for cash? Or SGOV?