The White House is weighing a variety of ways — including a vehicle mileage tax — to finance what are expected to be multitrillion-dollar infrastructure proposals, Transportation Secretary Pete Buttigieg said Friday.
Buttigieg, who spoke with CNBC’s Kayla Tausche, also argued that President Joe Biden’s forthcoming plans to rebuild U.S. roads, bridges and waterways would lead to a net gain for the U.S. taxpayer and not a net outlay.
“When you think about infrastructure, it’s a classic example of the kind of investment that has a return on that investment,” he said. “That’s one of many reasons why we think this is so important. This is a jobs vision as much as it is an infrastructure vision, a climate vision, and more.”
He also weighed in on several potential revenue-generating options to fund the project. He spoke fondly of a mileage levy, which would tax travelers based on how far they travel instead of on how much gasoline they consume.
Democrats have slowly pivoted away from a gasoline tax amid a simultaneous, climate friendly effort to encourage consumers to drive electric cars.
Pete Buttigieg speaks at the Senate Commerce, Science, and Transportation nomination hearings to examine his expected nomination to be Secretary of Transportation in Washington.Ken Cedeno | Reuters
“I’m hearing a lot of appetite to make sure that there are sustainable funding streams,” the transportation secretary said. A mileage tax “shows a lot of promise if we believe in that so-called user-pays principle: The idea that part of how we pay for roads is you pay based on how much you drive.”
The transportation secretary’s comments came as President Joe Biden prepares to detail sweeping infrastructure proposals that could cost $3 trillion to $4 trillion during a trip to Pittsburgh next week.
In his first news conference of his presidency, Biden on Thursday said that rebuilding U.S. physical and technological infrastructure was his next priority, critical not only to efforts to restore the economy, but also to remain competitive with rivals like China.
Buttigieg added Friday that the White House is considering a revival of Build America Bonds, a special class of municipals bonds first introduced in the Obama administration with interest costs financed by the U.S. Treasury.
Ok I see all kinds of things that could go sideways with this. First, are they going to remove the federal gas tax? If not that’s a tax on everyone down to even the people on welfare. Second how are they going to determine how many miles you have driven in a day, week. month or year? Will you have to install a device that automatically sends your mileage into a database, that will send you a bill? This has many problems. It will be able to track you for one. What happens if you don’t pay? Will they be able to access your bank account and take the tax? If they don’t repeal the gas tax it will also make everything more expensive as the truckers and freight carriers will have to raise prices to cover costs. Will this cover the airlines? What about shipping? Our government doesn’t have a tax problem it has a spending problem!