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Study: Motorists Are Primary Contributors to Federal and State Tax Revenue
Automotive industry study finds that cars contribute $134.5 billion in state and federal tax revenue.

CAR report cover
Motorists are pulling more than their own weight when it comes to paying for the nation's roads. Public transit advocates frequently claim that various user fees do not capture the amount of money invested into the highway system and that taxpayers subsidize roads. A report released last month by the Center for Automotive Research (CAR) shows that the opposite is true, that the automobile contributes more than any other manufacturing sector to the US economy.

"The automotive industry accounts for 13 percent of all state government tax revenues," Kim Hill, the study's lead author said in a statement. "This analysis furthers our understanding of how the automotive sector has a substantial impact on the US economy by contributing to the fiscal stability of state and federal governments. As economic conditions continue to improve, auto companies could see an increase in sales and employment that would generate additional state and federal tax revenues."

Last year, the Federal Highway Administration spent $41.8 billion on federal-aid highways, an amount that includes more than $4 billion on "livable communities" transit programs, $2.5 billion subsidizing speed traps and other expenditures that do not benefit drivers. The CAR report calculated the automotive industry contributed more than that amount, $43 billion, to the federal coffers in 2010. This figure included $29 billion in motor fuel taxes and $14 billion in direct income tax on auto manufacturers, parts suppliers and dealerships. CAR estimates the federal total would balloon to $69 billion if non-manufacturing jobs at suppliers such as marketing, finance and management were included in the tally.

State governments collected another $91.5 billion from the industry. This includes $60 billion in fuel taxes, registration fees and licensing charges. Another $30 billion in taxes were imposed on the sales and service of new and used vehicles. Those working for manufacturers and suppliers paid $860 million in income taxes. Auto companies paid $750 million in business taxes and license fees.

The study left out the significant revenue generated on taxing industry suppliers, imposing vehicle title fees, collecting personal property taxes and dishing out parking and speeding tickets. It also does not include property taxes paid by manufacturers.

The results are not surprising considering the Census Bureau's statistics on commuting suggest 90 percent of Americans get to work with an automobile. Nine out of ten taxpayers who work outside the home are motorists. CAR is a non-profit group that creates reports on behalf of the Alliance of Automobile Manufacturers, which represents BMW, Chrysler, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Porsche, Toyota, Volkswagen and Volvo.

A copy of the report is available in a 1.1mb PDF file at the source link below.

Source: PDF File Assessment of Tax Revenue Generated by the Automotive Sector (Center for Automotive Research, 4/11/2012)

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