The White House is considering a variety of options – including a road mileage tax – to fund the billions in infrastructure proposals, Transportation Secretary Pete Buttigieg said Friday.
Buttigieg, speaking with CNBC’s Kayla Tausche, also claimed that President Joe Biden’s upcoming plans to rebuild the country’s roads, bridges, and waterways would result in a net gain for the U.S. taxpayer, rather than a net expense.
“When you think of infrastructure, this is a classic example of the type of investment that comes out of that investment,” he said. “That is one of many reasons why we think this is so important. This is a job vision as well as an infrastructure vision, a climate vision and much more.”
He also discussed various potential revenue generating options to fund the project. He spoke fondly of a mileage levy that travelers would tax based on the distance of the trip rather than the consumption of gasoline.
“What is known as a vehicle mileage tax, or whatever you want to call it, could be one way of doing this,” he said.
Democrats have slowly moved away from a gasoline tax in favor of a mileage tax, while at the same time climate-friendly efforts have been made to encourage consumers to drive electric cars.
Pete Buttigieg speaks at the Senate Commerce, Science and Transportation nomination hearings to review his awaited nomination for Secretary of Transportation in Washington.
Ken Cedeno | Reuters
“I hear a lot of appetite that there are sustainable flows of funding,” said the transport minister. A mileage tax “is promising if we believe in what is known as the user pays principle: the idea that you pay part of our road costs depends on how much you drive.”
He added, “You hear a lot of ‘maybe’ here because all of these things need to be balanced and could be part of the mix.”
The Secretary of Transportation’s comments came as President Joe Biden prepares for detailed infrastructure proposals that could cost $ 3-4 trillion while on a trip to Pittsburgh next week.
In his presidency’s first press conference Thursday, Biden said rebuilding the U.S.’s physical and technological infrastructure was his next priority, which is vital not only to restore the economy but also to stay competitive with competitors like China.
Buttigieg added Friday that the White House is considering reviving Build America Bonds, a special class of municipal bonds first introduced in the Obama administration whose interest bills are funded by the US Treasury Department.
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BABs show “great promise in terms of the way we use this type of funding. There have also been ideas about things like a national infrastructure bank.”
His remarks on Friday came a day after he asked Congress on Thursday to make a “generational investment” to improve the country’s roads, bridges and waterways and to tackle climate change and racial inequality.
“It is almost universally accepted that a larger recovery requires a national commitment to repair and remodel American infrastructure,” Buttigieg told the House Transportation and Infrastructure Committee.