U.S. auto industry drives revenue

The U.S. auto industry generated more than $135 billion in federal and state revenue in 2010, according to a study by the Center for Automotive Research.

Of that amount, state government received $91.5 billion in tax revenue, while the federal government received at least $43 billion.

"The study confirms that the U.S. automotive sector has a large impact throughout the nation and provides support to state and federal governments in the form of taxes and fees collected from sales, employees, drivers and the auto companies themselves," the report said.

"As the economy continues in its recovery, auto sales improve and companies are able to create and retain jobs at greater rates, tax revenues generated by the sector could increase to even greater levels."

In Canada, the auto industry generates $1.6 billion a year in income, payroll and sales taxes, and another $468 million in municipal property taxes, said Jim Stanford, senior economist at the Canadian Auto Workers Union.

In 2009, both the U.S. and Canadian governments granted multibillion-dollar bailout loans to Chrysler and General Motors.

Both carmakers have since waged a turnaround after undergoing a massive restructuring, including emerging from U.S. bankruptcy protection.

Employment in Ontario's auto industry has increased by more than 8,200 jobs since the sector's restructuring in 2009, according to the Ontario Ministry of Economic Development and Innovation.

In total, the auto sector supports about 400,000 direct and indirect jobs across the province.

Across the United States, the auto-assembly sector employs about 169,000 workers.

The automotive industry accounts for 13 per cent of all state government tax revenues, said Kim Hill, lead author of the CAR study.

"This analysis furthers our understanding of how the automotive sector has a substantial impact on the U.S. economy by contributing to the fiscal stability of state and federal governments."

The study quantifies the financial support provided to government in the form of taxes and fees collected from sales, employment and business operations, as well as the use of the automobile.

For example, U.S. sales taxes from vehicle purchases totalled $30 billion, while income sales taxes by auto sector workers generated $15 billion.

A copy of the CAR report can be found at www.cargroup.org