People actually do move as a result of state income tax rates. California would be shrinking if not for the massive influx of immigration (much of it illegal).
The latest census indicated that states with low income tax rates enjoy less unemployment, better small business vitality, and much higher population growth.
I recently moved from MA to TX. I was able to maintain my salary level. Now I live with a much lower cost of living and have an extra $6,000 CASH that I don't spend on MA state income taxes.
This is not an insignificant amount... a 10% raise in MA wouldn't net me as much at the end of the year. That's a vacation and early payments on student loan debt for me. Compound that over a few years and it's no wonder why so much business is moving to cities like Austin, Houston, and Dallas.