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December 2008
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Here’s how car sales affect the rest of the country

A story that I’ve seen reported across the national media today – including here at the Los Angeles Times – explains very clearly how the economic impact of declining automotive sales ripples beyond metro Detroit into the rest of the country.

Three words: Sales tax revenue.

It’s not just the Detroit 3 who reported declines in sales numbers for November – but also Nissan, Toyota and Honda. (CNN story)

How much sales tax did you pay when you purchased your last car?

What did that money pay for?

How will your local and state government officials deal with that budget shortfall?

If you live so far away from Detroit that the automotive industry crisis was previously not on your radar screen, I think those dropping tax revenues will get your attention.

To be fair, declining car sales have more to do with the national economic crisis than what is happening in Michigan. After all, if the rest of you felt secure enough in your jobs and long-term savings and home values, you’d be buying cars, regardless of the nameplate.

But now you have an idea of how important car sales are to the rest of the country.

It’s not just a Detroit problem now.

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