A system and method of color data compression may perform variations of MRC compression including taking into consideration means and/or variances within k×k cells of an image, background texture, background smoothed color, and gradient components for determination of which parts of an image belong to the background and foreground MRC layers, for calculating thresholds values for such determinations, and determining correctness of determined thresholds and polarity, and may determine the background and foreground layer colors based on the variances, the gradient components, and neighboring pixels of non-color-assigned pixels of the background and foreground layers.