By Americans for Tax Reform
To pay your taxes, you need to work. To get to work, you need to keep your clunker working. To keep it working, you have to buy some new tires every once in a while. What you don't realize is how much you are paying in taxes when you buy those tires.
Consumers, of course, must pay sales tax on the tires, averaging about 5 percent. They must also pay an additional tax averaging about 1 percent to pay for tire disposal.
Out of what the consumer pays for tires, the producer must pay federal income taxes, state income taxes, federal payroll taxes, unemployment insurance taxes, workmen's compensation taxes, local property taxes and any local income taxes.
Altogether, these taxes consume about 30 percent of what the consumer pays for a tire. Counting the taxes paid directly by the consumer, this means about 36 percent of the final sales price of a tire goes to the government in taxes.