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Excise taxes a sizable hit for the average Joe

Look out, Joe Sixpack: The average household would pay about $166 more a year in the taxes on beer, wine, gasoline, tobacco and liquor that Congress is considering. That's the estimate of a study done for the National Chamber Foundation, an opponent of the tax increases. A 16-cent tax on a six-pack of beer tax would cost the average household about $17.63 annually, while a 9{-cent gas tax would drain about $112.79 a year, the researchers say. An 8-cent-a-pack cigarette tax increase would cost an average $24.32 more a year.

The study notes that the excise taxes would reach deepest into the pockets of the poor, women and blacks _ all traditional Democratic constituencies.

To balance the tax burden, Democrats have been advocating higher income taxes on the wealthy. They won one battle in the House, which last week passed a package that shifts some of the tax load onto the upper class by boosting income tax rates. The Senate-passed package does not increase income tax rates, but it does include a gas tax increase.

Negotiators spent the weekend reconciling the differing House and Senate versions. One thing appears certain: The federal government's excise taxes will go up. None of the "sin" taxes _ on beer, cigarettes and other items _ are huge, but taken together they amount to a sizable hit to the average taxpayer.

"There's no shark attack here, but you can get nibbled to death by ducks, too," said Robert A. Ragland, chief tax counsel for the National Chamber Foundation.

The National Chamber Foundation is a research arm of the U.S. Chamber of Commerce, a group that opposes the tax increases. The analysis was done for the foundation by Data Resources Inc., which used consumer behavior studies to determine the tax burdens. The study was circulated to some members of Congress in the last several weeks. It does not take into account a consumer's decision to buy less if the taxes increase.

According to the study, the most expensive proposed excise tax would be the 9{-cent-a-gallon tax boost passed by the Senate last week. The tax, costing $112.79 a year, is one of the more unpopular elements of the tax package. The federal gas tax is currently set at 9 cents a gallon.

The House shied away from a new gas tax, opting instead for a one-year freeze on the inflation adjustment for income tax brackets and personal exemptions. That would mean a higher income tax bite for most taxpayers.

A study by the House Ways and Means Committee asserts that the one-year freeze is fairer than the gas tax. The poorest fifth of the nation's taxpayers would dish out $59 a year if the gas tax increases 9{ cents a gallon, and just $5 for the inflation adjustment, the committee study said.

Moreover, the study for the National Chamber Foundation yielded similar results, determining that households headed by black men earning between $15,000 and $25,000 would see a greater portion of their income go to the added gas tax than other demographic groups.

Among the other findings by the Chamber study:

Households headed by black women with a high school education or less would be hardest hit by the cigarette tax increase. Researchers say that women and less educated people in general are more likely to smoke.

Both the House and the Senate plans have an 8-cent-a-pack cigarette tax, making it likely the final proposal will include the tax increase.

People along Florida's Suncoast and Tampa Bay like beer, making the average household more likely to pay a larger chunk of the 16-cent-a-six-pack tax proposed by both the House and Senate. The average household nationally would have to swallow a $17.63 beer tax increase, while it would reach between $19 and $20 a year along the Suncoast, the researchers say.

The average household would pay $6.63 more if the wine tax is increased 21 cents a bottle. That's the tax the Senate has proposed. The House plan would increase the tax 22 cents on a bottle of table wine.

A tax on liquor would cost about $4.95 a year more if the tax is boosted by $1.50 a gallon, as proposed in the budget summit this summer. House and Senate tax writers proposed a slightly lower liquor tax.