A state can justify and sustain higher taxes on the wealthy by offering government services which indirectly benefit the wealthy (the externalities you mention). But it doesn’t follow that an arbitrarily poorly-ran government can sustain arbitrarily high taxes on the wealthy.

There’s some manifold of Pareto-optimal solutions to the problem of taxes and services.

California, for example, spends a lot of money to get not-great public schools, and has housing costs that are out of control. So if you’re importing new hires from other states, and pay them a lot to live here, and personally pay high taxes on top of that… that doesn’t seem like a Pareto-optimal point.

At some point, the wealthy will decide to move someplace that looks more Pareto-optimal. Better externalities, lower taxes, or both.

That's not the issue in question though. I mean, everyone wants zero taxes and everything a good government can deliver them with, of course, none of the bad things government can deliver. The real question is what is the right compromise between everything that fits your needs. Is it really worth having sports stadiums? Maybe the government should provide a professional sports team, maybe not. How much should the government put into your health care? I mean, we always hear about the so-called death panels when you have a government-run health care system, but regardless of how much that is just pure mongering, the reality is there is always going to be more money you could spend in health care. Is it worth it for any particular question is something up for debate.