Well, it’s clear that New York Governor David Paterson is in trouble.

First, he gets outed as releasing personal information about Caroline Kennedy in order to derail her Senate bid, and now Democrats are rebelling against his budget, because they think that it is stupid to slash services for 90% of the population to the bone in order to keep income tax rates on the rich low.

They are proposing an increase in state tax rates on earnings about $¼ million a year, from 6.85% it goes to 8.25% for $250-500K , 8.97% for $500k-1m , and 10.3% above $1M.

I think that the conflict here is that, following the support after Spitzer left office, Democrats are unsatisfied with Paterson, who has seemed to spend his time cozying up to the state ‘Phants and to Wall Street with his plan or draconian cuts and tax increases or new taxes on sweet drinks and music downloads.

Why? Because he is either a liar or an idiot:

Another question mark concerns Governor Paterson. He has sent mixed signals in private and in public on the matter, saying on the one hand that he thinks raising taxes would cause wealthy people to move out of New York, and on the other hand that all options to plug the budget gap have to be on the table.

Rich people live where they want, and New York City and its environs, and this is where the high-rollers live, already live in one of the most expensive places in the world.

If they wanted to move to save a few bucks, they already would have done so.

Seriously, what are they going to do, move to New Jersey?

My theory is that he wants to have an enormous war chest when the primary rolls around to scary away opponents, and enormous war chest means Wall Street bucks.

Considering the performance of Wall Street in the public mind, and the fact that leading rival, New York State Attorney General Andrew Cuomo, just announced in investigation of Merrill’s recent bonuses, which both makes Paterson look like a turd, and Cuomo look like a hero.