“A Distributional Analysis of the Governor’s Tax Reform and Relief Proposal.”

It doesn’t sound like a title that would exactly fly off the shelves, but it was the document many in Maine political circles were waiting for before they solidified their positions on the marquee political issue this season in Augusta: Gov. Paul LePage’s proposal to overhaul Maine’s tax code.

The 20-page document from Maine Revenue Services came out last week, and a number of Democrats immediately pointed to one key finding: That the top 1 percent of taxpayers, in 2019, would receive a $10,679 tax cut on average under the LePage plan while someone earning Maine’s median household income of $48,453 would get an average break of $145.

But there are a number of other lessons in the analysis document — both to do with politics and tax policy.

Benefits at the bottom and the top: A key takeaway from the numbers projected by Maine Revenue Services is that the LePage tax plan, as designed, offers the biggest benefits to those on the top and the bottom of the income scale. In 2016, the poorest 20 percent of taxpayers would see their aggregate tax burden drop by nearly 25 percent. The top 1 percent would see 5.1 percent of its tax burden disappear. Interestingly, the aggregate amounts of tax relief for those two groups is just about the same — $25.5 million for the top 1 percent and $26.8 million for the bottom 20 percent.

That’s a result of the combination of a lower income tax that allows many more low-income residents to pay no state income tax, a higher sales tax and refundable credits to offset low-income residents’ sales and property tax burdens.

Politically, a clever design: The LePage administration showed it could design a tax package with major benefits for the wealthy that didn’t necessarily make Maine’s tax code more regressive. Overall, low-income people would end up shouldering about the same portion of the total tax burden that they do now.

The Maine Revenue Services analysis used a numerical score of a tax code’s progressive or regressive nature known as the Suits Index. In the end, Maine Revenue Services’ projections for how the variety of tax changes would affect different income groups barely changed the Suits Index score.

Why is this a clever design? An early critique of the LePage tax plan was that it would result in a more regressive tax code. Maine Revenue Services’ projection that it wouldn’t offers the LePage administration a convenient counter-argument to the regressivity claims.

What it considers and what it doesn’t: The Maine Revenue Services analysis of the LePage tax plan shows it’s just as important to know what the analysis considers as it is to know what it doesn’t. The study left out consideration of a few key factors that Maine Revenue Services has included in past analyses of how Maine’s tax code affects taxpayers in different income groups:

— The study doesn’t factor in either the estate tax or the corporate income tax. LePage’s plan would ultimately eliminate the estate tax — to the benefit of a few dozen of Maine’s wealthiest each year. Eliminating it is clearly a change that would make Maine’s tax code more regressive. And while the corporate tax is only paid by businesses and not individual Maine residents, it is possible to project how changes to the corporate tax affect individual taxpayers — namely, company shareholders and, to some extent, employees.

— The study also excludes the federal offset — the state income tax that taxpayers can deduct from their federal taxable income. Since the LePage plan would lower income taxes, that means taxpayers who itemize their deductions can claim less state income tax on their federal tax return. Albert DiMillo, a retired corporate tax director from South Portland, estimates that this reduced federal deduction would increase those taxpayers’ federal tax liability by $90 million in 2019, effectively wiping out that amount from the $292 million in total tax relief the LePage plan purports to offer in 2019.

When it comes to the LePage tax plan, the whole picture is not solely that tax picture. Maine Revenue Services estimates that the tax cut package would leave a $149.3 million hole in the two-year state budget for 2018-19.

How the Legislature compensates for that revenue loss — potentially through cuts to services low-income residents rely on disproportionately — is also part of the picture to consider in evaluating how the LePage tax plan affects Maine taxpayers.

The BDN Editorial Board

The Bangor Daily News editorial board members are Publisher Richard J. Warren, Editorial Page Editor Susan Young, Assistant Editorial Page Editor Matt Junker and BDN President Todd Benoit. Young has worked...