If your household pulls in less than $102,000 a year, you're not going to like this.

A new state study confirms what you probably already suspect: You pay more of your income in state and local taxes than the state's wealthiest residents pay. In addition, more of the state's tax burden is being shifted onto you, and off of businesses ? and being shifted away from businesses onto property taxes.

Those conclusions are all part of the "2005 Minnesota Tax Incidence Study." The study, conducted every two years by the Minnesota Department of Revenue, evaluates the ongoing effects of state tax policies. The latest study gives the fullest picture yet of the impact of tax cuts during the Ventura administration and the so-called "no new taxes" approach of the Pawlenty administration.

The study essentially evaluates who pays how much of all the taxes collected by the state, local governments and school districts. It includes the usual suspects ? income taxes, property taxes and corporate taxes ? plus sales taxes, motor vehicle registration, alcohol and tobacco taxes, the gasoline tax, and others. It also calculates the impact of businesses passing tax costs along to customers.

The study then projects how everybody's shares are likely to change by 2007, which is the end of the two-year state budget cycle now being debated at the Capitol. The study's results give ammunition to critics who look at the continuing budget messes at the state and local levels and say, "Tax the rich!"

Becoming more regressive
"More and more taxes are being shifted to people with middle and modest incomes," says Wayne Cox, director of Minnesota Citizens for Tax Justice, who has done extensive analysis of the tax incidence study.

In the study's own words, Minnesota's tax system "shows a noticeable move toward regressivity."

Regressivity basically means that those with lower and moderate incomes pay higher tax rates than wealthier households. In Minnesota, this occurs especially as taxes are shifted away from the income tax, which has higher rates on higher incomes, toward other taxes, which all tend to be regressive, Cox says.

Sorry to say, it's only going to get worse. In real numbers, the study projects that the wealthiest 5 percent of state residents ? those who make more than roughly $172,000 a year ? can expect to pay 10 percent of their income in taxes in 2007.

The richest 1 percent ? those with incomes over $407,000, can expect to pay only 8.5 percent in 2007.

But the 40 percent of households who make between roughly $43,200 and $90,000? We can expect to pay a higher rate than they do ? 11.8 percent ? when all is said and done.

Additional disparities
The actual tax disparity is even worse than the study suggests, Cox says. He lists two ways.

If you factor in what the study calls the "federal offset," the rich do even better still. The offset is the result of taxpayers reducing what they owe the IRS by deducting state and local taxes on their federal 1040s.

Using Revenue Department figures, Cox calculates that, after the federal offset, middle-income Minnesotans making roughly $40,000 to $80,000 pay 11.3 percent of their income in taxes. The richest 1 percent, on the other hand, pay only 4.7 percent.

"In other words, taxpayers in the middle are paying well over twice the rate being paid by those with the very highest incomes," Cox says.

The other disparity, he says, is that the study doesn't include the impact of fees. But fees have a bigger impact on low- and moderate-income residents.

"They're the big losers in the exchange," Cox says.

The average tax cut for the 60 percent of households with middle incomes was less than $100, he says. Higher fees have more than eaten that up ? and fees are everywhere: extracurricular activities and busing in school districts, higher college tuition rates, higher charges for nursing home residents, and higher rates on everything from camping in state parks to parking tickets to street lighting in St. Paul.

Meanwhile, the state's millionaires continue to enjoy more than $5,000 a year in income tax cuts, Cox says.

"How is it a higher priority for the state to keep these tax cuts while forcing schools into financial crisis or removing affordable health care from tens of thousands of people?"

What fair share?
The tax incidence study also debunks the argument that rich people, because they make more money, pay more in taxes.

The richest 1 percent have 13.9 percent of the state's income, but pay only 11.1 percent of the taxes, the state's own numbers show. The richest 5 percent have 28.1 percent of the income, but pay only 26 percent of the taxes.

In contrast, the 40 percent who make between $35,700 and $102,500 pay more than their fair share: They have 44.6 percent of the income, but pay 46.6 percent of the taxes. Meanwhile, despite the disparities, the study confirms that the overall tax burden in Minnesota continues to decline, from a high of 12.9 percent in 1994, to 11.3 percent in 2002 and an estimated 11.1 percent in 2007.

Adapted from The Union Advocate, the official newspaper of the St. Paul Trades and Labor Assembly. E-mail The Advocate at: advocate@mtn.org