This is a slam dunk for going big. Under most reasonable sets of assumptions, the tax break on investment gains from holding investments in a 529 will exceed the tax break from CA state taxes, if that ever happens (I know CA's budget is much better than it was a couple years ago, but it's still not great, so my guess is that they won't unveil any new programs that would reduce tax revenue).

Consider $10k invested in either a taxable account or a 529 plan. I'll use 12 years as our investment timeline, and 7% annual returns to come up with an estimate. I'll guess that you're in CA's 9.3% tax bracket, and that your federal capital gains tax rate is 15%, and all of your investment gains come in one lump sum at the end of 12 years (that's the most advantageous way to treat the taxable investments). Using these conditions, we have:

1) invested in 529 plan, no change in CA law: $22,522 at the end of 12 years.

2) stay in taxable account: $20,643 at the end of 12 years

I the law changes after 5 years, you sell the investments, put the proceeds into a 529, and take a deduction you'd come out ahead by ~$700 that year, which if you put into the 529 would result in an advantage of about $1125. This is close to the best case scenario for not putting money in a 529 now.

Now let's examine a more realistic scenario for the tax treatment of taxable accounts, and delay the introduction of deductibility of 529 plans to 8 years from now. We'll say that 3% of the investment gains are dividends, taxable at 15% each year. The remainder comes from capital appreciation, which still impressively has no turnover. I just made these numbers up, but the final amount in the 529 plan comes to $22,500, just slightly less than putting the money into a 529 plan now.

You can run the calculations yourself if you want, but I don't think the odds of a small gain from CA changing its laws years down the line are worth the risk of giving up guaranteed tax-free gains of money you can put away now.