Who pays what share of taxes? For 25 years, Minnesotans have been better able to answer that question than the residents of any other state, thanks to a biennial Revenue Department report known as the Tax Incidence Study.

The latest report, issued March 1, should be required reading for Gov. Mark Dayton as he prepares to revise his 2014-15 budget next week, and for the Legislature as it prepares its own version in the next month. Looking both backward and forward to 2015, the latest numbers strengthen the case for some of Dayton's Jan. 22 tax-reform proposals and weaken it for other features. For example:

• Business taxes fall hard on middle-income consumers, the study shows. When businesses pay the current sales tax, 54 percent of the cost gets passed along to Minnesota consumers. Minnesota-based business owners pay 7 percent, and a 39 percent share is "exported" to consumers, employees and shareholders in other states.

While the study did not specifically analyze Dayton's proposal to extend the sales tax to business services, it notes that according to economic theory, additional business taxes are likely to fall less on owners, both in and out of state, and more on consumers and employees in Minnesota than existing business taxes do.

That's another key reason for Dayton, who says he does not want to add to middle-class tax burdens, to back away from his unpopular business sales tax notion. This page has also noted that the proposal would damage the competitiveness of the state's economy.

• The property tax is slated to pull a smaller share of the total tax load as the recovery boosts incomes and, hence, income taxes. Property taxes accounted for 33.9 percent of all state and local taxes in 2010. That figure is expected to fall to 32.4 percent in 2015.

The trend takes steam out of Dayton's argument for a whopping $1.4 billion homeowner property tax rebate over the next two years. So does the finding that homeowner property taxes are not as regressive — that is, as disproportionately burdensome to lower-income earners — as is the state sales tax.

• Income-based property tax relief programs work well to mitigate the property tax's regressive impact. Both the property tax refund (a k a the "circuit breaker") and the renters' credit are effective tools. This newspaper has recommended replacing Dayton's property tax rebate with the less costly, better-targeted circuit breaker.

One can deduce from the report that Gov. Tim Pawlenty's 2009 "unallotment" cuts in the renters' credit added considerably to the distress the recession visited on people with incomes less than $23,500. They experienced an ill-timed spike in total effective tax rate between 2008 and 2010. Dayton is right to ask the Legislature to restore the renters' credit to prerecession levels.

• Top earners will keep paying lower effective tax rates than other Minnesotans as recovery from the Great Recession proceeds, the study projects. The top 1 percent of earners — those with incomes in excess of $500,000 — on average will pay 9.6 percent of their incomes in state and local taxes in 2015, it says, compared with middle-earner rates of just under 12 percent. That's been a persistent pattern for more than a decade.

The tax structure's built-in break for upper earners combines with widening income inequality to buttress Dayton's call for higher income taxes for the state's top earners. We support an increase, albeit a more modest one than Dayton recommends.

The report says the top 5 percent of earners will take home 31.3 percent of the state's household income in 2015, up from 30.9 percent in 2010. By comparison, the bottom 40 percent of earners' share is projected to fall to 9.6 percent in 2015, down from 9.8 percent in 2010 and 11.2 percent in 2006.

• State/local taxes will stay regressive overall, even as recovery is projected to strengthen the one tool policymakers have to distribute taxes fairly across all incomes — the state income tax.

Around the country, a number of states are considering reducing or abolishing their income taxes and expanding their sales taxes in order to appeal to high-income residents. That swap is guaranteed to make their tax structures more regressive.

It may be no coincidence that none of those states as regularly and rigorously report tax "incidence" as Minnesota does. Their politicians — and their voters — may not know that state sales taxes fall harder on low- and middle-income earners than either property or income taxes do.

Thanks to the work of economist Paul Wilson and other veteran staffers in the state Revenue Department, Minnesota policymakers know better. So do Minnesota voters.

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An editorial of the Star Tribune (Minneapolis). Follow the editorial board on Twitter @StribOpinion and on Facebook.