New York's Democratic governor-in-waiting David Paterson on Friday said he aimed to avoid "raising anybody's taxes," his strongest signal so far that he will not support a millionaire's tax increase.

The Democratic-led Assembly wants to wring $1.5 billion out of the 70,000 millionaires who work in New York.

At least one political ally of Paterson has said he believes the new governor will push for it, partly because Paterson is still loyal to the Harlem voters who first elected him to the state senate.

Gov. Eliot Spitzer, who resigned on Wednesday after reports that he consorted with prostitutes, opposed the tax increase, as does the Republican-led senate.

Paterson, who becomes governor on Monday, told an Albany radio show on Friday: "We want to try to do this (job) without raising anybody's taxes. Because that's what's driving people out of this state. We're pretty much the highest taxed per capita state in the union with the exception of Hawaii."

New York politicians and businesses are all trying to figure out where Paterson stands on the millionaires tax hike because they fear such an increase would cause the state and New York City to lose companies to other areas.

Wall Street's banks and brokerages are particularly fearful. They are reeling because the financial monster spawned by subprime mortgages keeps claiming new victims, as evidenced most recently by Friday's rescue of Bear Stearns.

The damage tax increases can do to a money center was spotlighted earlier this week when the United Kingdom imposed a levy on "non-domiciled" individuals. They now will have to pay "reasonable charge" after seven years to maintain the right to be taxed differently from other residents of the country.

This sparked concerns that foreigners might quit London for another money center. London's economy has thrived in recent years, partly because so many hedge funds and other "wealth creators" make their home there. Continued...