Tax the rich? Done. Tax fairness? Well ...

As he confronts the final budget-setting showdown of his career, Gov. Mark Dayton's legacy on taxing and spending is pretty well set.

Dayton sought the governorship in 2010 on the strength of an admirably blunt battle cry.

"Tax the rich!" he explained.

And he has.

Several reports this spring show how successfully Dayton has shifted more of Minnesota's tax burden onto the shoulders of the well-to-do. But the data also expose the limits on "tax fairness" imposed by stubborn economic and political realities.

The Minnesota Center for Fiscal Excellence, a business-backed think tank, has released its latest comparison of state income tax systems. It finds, for the first time, that Minnesota has the "most progressive" state income tax in America.

This isn't just a matter of Minnesota having long had some of the highest top tax rates on lofty incomes — rates that have been raised in the Dayton years. The state also offers, and has enhanced in recent years, generous "refundable" income tax credits for the working poor, many of whom receive payments from the state rather than paying income taxes.

The combination means that the gap between Minnesota's income tax "burden" on lower incomes vs. higher incomes is now greater than any other state's.

To take one illustration: Among the 42 states that have state income taxes, Minnesota imposes the lightest "burden" in America on a married couple with $35,000 in income. But it extracts the heaviest burden in America on a single senior citizen with $75,000 in income.

The truly rich in Minnesota face high income tax burdens, to be sure. But it's worth noting that the state's comparatively high income tax also reaches some whose lifestyles are less than fabulous.

A broader comparison of all state and local taxes comes from the Institute on Taxation and Economic Policy, a progressive Washington research group. It, too, ranks Minnesota's tax system today among the country's most progressive — or, as ITEP says, among the "least regressive."

"Virtually every state tax system is fundamentally unfair," the report declares, meaning that state and local taxes as a whole typically collect a larger portion of the incomes of the poor than of the rich.

Property taxes, sales taxes, gasoline taxes, tobacco and alcohol taxes are among the many ungraduated levies that hit the poor relatively harder. But states like Minnesota, with strongly progressive state income tax systems, are less unfair than others, in ITEP's view. It ranks the state the sixth least unfair in America — giving part of the credit to Dayton's "tax the rich" policies enacted by a DFL-controlled Legislature in 2013.

A GOP Legislature this year is pushing hard to slash taxes through an array of targeted cuts, some of which — de-indexing cigarette taxes, say, and cutting rates for low income taxpayers — would increase progressivity. Dayton wants much smaller progressive cuts.

Meanwhile, the most complete picture of what progress Dayton has and hasn't already made in altering the regressive nature of state taxes comes from the Minnesota Department of Revenue's always fascinating "Tax Incidence Study." Produced every other year, the 2017 edition shows that the Dayton era has essentially restored overall state and local taxes on the rich to the level they were at a quarter century ago. Meanwhile, effective tax levels on everyone else have changed little under Dayton.

The total effective state and local tax rate on the richest 1 percent of Minnesotans (household incomes over $512,192) was 9.5 percent when Dayton was elected in 2010. It jumped to 11.5 percent in 2014 and will be 11.4 percent in 2019, the study projects.

Interestingly, Minnesota's 1-percenters were paying more, 11.6 percent, in 1992. Their rates fell throughout the late 1990s and early 2000s, the report shows, largely because incomes for the rich were soaring in those years, especially through stock market gains. Dayton's 2013 hikes put tax burdens on the rich back where they had been.

As noted, overall effective rates on less-affluent Minnesotans have changed little — partly because the DFL Legislature back in 2013-14 couldn't resist enacting a big hike in the cigarette tax, one of the most regressive of all taxes.

The net effect is still that under Dayton, Minnesota's tax system has become meaningfully less regressive. But it should be said that this governor has taxed the rich in order to fund government, not to reduce the tax burden on others.

We encounter here two of the main reasons state and local tax systems tend to be persistently "unfair" — or anyhow, unprogressive. Politicians not only like to spend whatever money they extract from the rich, but they rather like many regressive taxes — sometimes for good reason.

Vice taxes like those on tobacco and alcohol discourage unhealthy habits and raise funds to cover the public costs of those habits. Property taxes and "user fees" like gas taxes likewise link the demand for public services with their funding.

Less wholesome is politicians' fondness for business taxes, which appeal in part because few voters understand who pays them.

The Tax Incidence Study, edition after edition, does a heroic job of explaining that "taxes on business are regressive" — for the simple reason that businesses pass on many of those costs through higher prices and lower wages, which hit the poor hard.

Indeed, while these types of calculations have their critics, the Tax Incidence Study reports that if it were not for business taxes, Minnesota's overall state and local tax system would be significantly progressive.

One last important limitation on tax fairness at the state level is simply that America is the original free trade zone and common market. People, businesses and capital can move from state to state at will, facing virtually no legal or cultural obstacles. This produces prosperity, but it means states can't afford to become too unfriendly to those with riches to protect.

The federal tax system can be somewhat more progressive partly because it's rather harder to leave the country. But through corporate inversions and other maneuvers, we're learning that globalization may be modifying that reality, too.

President Trump's newly unveiled tax overhaul plan would, among other things, slash business tax rates in hopes of easing corporate wanderlust. It would also eliminate the federal deductibility of state taxes, a major federal subsidy that makes it a little easier for states so inclined to tax the rich without sending them fleeing. It might hit the nation's "most progressive" system hard.

D.J. Tice is at Doug.Tice@startribune.com.