The Political Insider

Secretary of Transportation Pete Buttigieg walked back any discussion of imposing a mileage tax on American drivers to help pay for an upcoming multi-trillion dollar infrastructure plan from President Joe Biden.

Buttigieg told CNN on Monday of the mileage tax,

“That’s not part of the conversation about this infrastructure bill. Just want to make sure that’s really clear. But you will be hearing a lot more details in the coming days about how we envision to be able to fund this.”

The comments are an apparent reversal from just last week, when CNBC reported Buttigieg said a mileage tax was on the table, and said it “showed a lot of promise.”

A mileage tax is the notion that drivers would pay a tax based on the number of miles they drive.

While Buttigieg has also ruled out any gas tax increase, he has not ruled out another idea he talked about last week.

That is the idea of reviving Obama-era “Build America Bonds,” which are a special class of municipal bonds where the interest costs are subsidized by the U.S. Treasury.

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How To Pay For It?

President Joe Biden will unveil his infrastructure proposal on Wednesday. The package comes in two legislative parts.

The first part deals with the country’s roads, bridges, building electric vehicle infrastructure, and other physical infrastructure.

The second part, which will be apparently be introduced in April, will not focus on infrastructure, but rather things like universal pre-K and free community college.

The question now is how to pay for it.

Yahoo reports that Biden’s plan could cost as much as $4 trillion, with $3.5 trillion in tax hikes.

White House Press Secretary Jen Psaki said hinted at tax hikes when answering a question about how to pay for the plan.

“But he, of course, believes that investing in our infrastructure, continuing to create good-paying union jobs is front and center, but he also believes that we have an opportunity to rebalance, to take — to address our tax code that is out of date, and — and some could pay more in our country that are not currently.”

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Moving The Money Around

According to a USA Today report, the non-partisan Congressional Research Service says, traditionally, fuel taxes have provided 85% to 95% of money in the Highway Trust Fund. 

However, since 2008, The Congressional Budget Office says that Congress has transferred $157 billion from the general treasury to the Highway Trust Fund to cover shortfalls for authorized programs.

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How Is Infrastructure Bill Being Received By GOP?

A massive, big-government spending package is not exciting Republicans at all.

Senate Minority Leader Mitch McConnell (R-KY) predicted that no Republicans will vote to raise taxes.

“I think the Trojan horse will be called infrastructure, but inside the Trojan horse will be all the tax increases,” McConnell said. He added that he did not “expect any enthusiasm on our side for a tax increase.”

Sen. Susan Collins (R-ME) said, “I would not anticipate that it would be well received.” However, the report from The Hill states that as a moderate Republican, Collins may be someone Democrats may try to bring to their side.

Sen. Rick Scott (R-FL) said, “Raising taxes is not gonna help anybody in our country.” Sen. John Barasso (R-WY) commented that the tax increase the Democrats are considering “would be the most significant tax raising piece of legislation in the last 28 years.”