White House considers vehicle mileage tax to fund infrastructure, Buttigieg says

White House considers vehicle mileage tax to fund infrastructure, Buttigieg says

Pete Buttigieg, the transportation secretary, said Friday morning that the White House is weighing a variety of ways to finance what’s expected to be its multitrillion-dollar infrastructure proposals.

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.

“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.”

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

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.

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BABs show “a lot of promise in terms of the way that we leverage that kind of financing. There have been ideas around things like a national infrastructure bank, too.”

His remarks on Friday came a day after he implored Congress on Thursday to make a “generational investment” to improve the nation’s roads, bridges, and waterways and combat 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,” Buttigieg told the the House Transportation and Infrastructure Committee.