Automobile production, sales, service and use provided state government politicians and bureaucrats with $91.5 billion in tax revenues in 2010, according to a study just published. Federal tax coffers were enriched by at least $43 billion, according to the Center for Automotive Research.
The amount of revenue involved begs questions about the lack of U.S. industrial policy – alone among industrialized countries – as well as what critics say is anti industry attitudes among politicians and regulators. These critics also point to the actively hostile policies of the U.S. State and Defense Departments, which support and protect offshore automakers, while increasing taxes for U.S. based automakers.
“The automotive industry accounts for 13% of all state government tax revenues,” said Kim Hill, director of the Sustainability and Economic Development Strategies group at CAR and the study’s lead.
The study, produced by the Sustainability and Economic Development Strategies group at CAR, quantifies the financial support from the automotive sector that is provided to state and federal governments in the form of taxes and fees collected due to sales, employment, and business operations, as well as the use of the automobile.
The study emphasizes the breadth and depth of these revenue contributions. Aside from the obvious sales taxes generated when vehicles are purchased ($30 billion), government agencies collect taxes from a variety of sources, including income taxes paid by employees working in the automotive sector ($15 billion); taxes and fees on fuels, registrations, and licenses paid by drivers ($89 billion); and corporate income taxes and licensing fees paid by automotive companies themselves ($750 million). The study also provides a detailed breakout of automotive tax revenues for each state in the nation.