Are the rich in California getting richer or not?

It's sometimes hard to know. From Capitol Alert:

The number of Californians reporting incomes of more than $1 million increased sharply last year [the 2010 tax year], as did their share of the income stream, a new report from the Franchise Tax Board reveals.

From Bloomberg:

Tax returns with adjusted gross incomes topping $500,000 fell to 98,610 in 2009, the latest year available, from a recent peak of 146,221 two years earlier, according to data from the Franchise Tax Board, the state agency that collects income and corporate taxes.

Here's an example of why the state should not be so reliant on tax revenues among the very wealthy. Their earnings are just too volatile. Incomes did fall sharply between 2007 and 2009, the result of recession-related losses (hedge funds got killed during this period). But investors have since recouped some of their money, which probably explains why the $1 million+ plus category took off in 2010.