A couple of years ago when the auto industry and the entire economy was tettering on the brink of collapse, some politicians in Washington said they should let the auto industry fail. Such statements show you how out of touch most politicians are with reality. Thankfully they bailed out General Motors and Chrysler and the auto industry recovered. But what if they haden't made those loans? The auto industry and the vehicles they produce are a cash cow for government taxes. Without those taxes, government would be hard pressed to keep on spending like a drunken sailor. Consider the following facts about how much tax revenue the auto industry and the cars we drive produce for our local, state and federal governments:
The automotive industry generates more than $735 billion in federal and state revenue, according to a study by the Center for Automotive Research in Ann Arbor, Michican. The revenue comes from income taxes, sales taxes, corporate income taxes, licensing and registration fees and fuel taxes. This study confirms that the U.S. automotive sector has a huge economic impact throughout the country. In 18 states, autos generate 15-23 percent of state tax revenues. Cars are a massive economic driver, from their production and sales to their use and maintenance. Here ae some of the findings from the study:
In 2010, the auto industry generated at least $43 billion in federal tax revenue, including $14 billion in income taxes and $29 billion from federal motor fuel taxes. (Property taxes are not included.)
The auto industry also generated more than $91.5 billion in state government revenue in 2010, or 13 percent of total state tax revenue on average.
Of the total state tax revenue, $60 billion is produced from use taxes and fees (fuel taxes, license and registration fees).
$30 billion of state tax revenue is generated from sales and service of vehicles.
$860 million comes from state income taxes on direct employment by automakers, suppliers and dealers.
$750 million is generated by state business taxes (corporate income taxes, licensing fees).
Revenues from car sales alone totaled over $564 billion in 2010, an increase of 17 percent from the previous year.
The manufacture and sales of parts, along with repairs and service, account for another $173 billion in economic activity. So, automobiles drive more than $735 billion into the economy each year.
Eight million people are employed directly and indirectly as a result of the manufacture, sale and repair of automobiles. Those 8 million people earn $500 billion in compensation. These are American families living all over this country. In many communities, they form the backbone of local and even state economies.
So the next time you hear some politician bad mouthing cars or the automotive industry and insisting that cars should be taxes more heavily, read them some facts.
To view federal and state information on taxes and fees generated by autos, visit AutoAlliance.org.
The Alliance of Automobile Manufacturers is a trade association of 12 car and light truck manufacturers including BMW Group, Chrysler Group LLC, Ford Motor Company, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen and Volvo.