New study confirms long standing truth: Auto sales drive the U.S. economy
A new report from the Center for Automotive Research in Ann Arbor, MI finds that new vehicle sales and service account for more than $735 billion in federal and state revenue in the U.S.
“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,” said Mitch Bainwol, president & CEO of the Alliance of Automobile Manufacturers. “Cars are a massive economic driver, from their production and sales to their use and maintenance.”
Among the reports key findings are these:
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 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 U.S. car sales alone totaled over $564 billion in 2010, an increase of 17 percent from the previous year. The manufacturers parts providers, 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, or about 5% of total U.S. GNP.
“Eight million Americans 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. And as jobs are added, these numbers will climb. So auto policy is central to the economic vitality of virtually every state,” said Bainwol.
And, Bainwol might have added, thats why the government rescue of the auto industry was essential!
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