The Biden administration is considering imposing a vehicle mileage tax on Americans — as a way to fund a multi-trillion-dollar infrastructure plan set to be announced by President Biden, Transportation Secretary Pete Buttigieg said Friday.
“I think that 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,” Buttigieg said on CNBC during an interview.
“The gas tax used to be the obvious way to do it; it’s not anymore… So, a so-called vehicle miles traveled tax or a mileage tax, whatever you want to call it, could be the way to do it.”
The levy would tax drivers on the number of miles they travel, as opposed to the amount of gasoline they consume, which is no longer a reliable stream of income with so many electric cars on the road.
“I’m hearing a lot of appetite to make sure that there are sustainable funding streams,” Buttigieg said.
“You’re hearing a lot of ‘maybe’ here because all of these things need to be balanced and could be part of the mix,” the secretary cautioned, saying the mileage tax is only a consideration at the moment.
Buttigieg later added the White House is also considering bringing back Build America Bonds, which are a special type of municipal bond first introduced by the Obama administration that have interest costs covered by the US Treasury.
He said the bonds show “a lot of promise in terms of the way that we leverage that kind of financing.”
His comments came one day after the first press conference of Biden’s presidency, where he announced plans to unveil a $3-4 trillion infrastructure bill in Pittsburgh next week.
The president argued that rebuilding US physical and technological infrastructure was a key priority to not only boost a sluggish economy, but to remain competitive with overseas rivals like China.
Buttigieg said a plan to rebuild the nation’s roads, bridges and waterways would bring a significant return of investment.
“When you think about infrastructure, it’s a classic example of the kind of investment that has a return on that investment,” the former presidential hopeful told CNBC.
“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.”
A day prior, Buttigieg urged the House Transportation and Infrastructure Committee to make a “generational investment” to improve infrastructure while simultaneously combating climate change and racial inequity.
“There is near-universal recognition that a broader recovery will require a national commitment to fix and transform America’s infrastructure,” the secretary said.