Transportation Secretary Pete Buttigieg said Friday that among the options being considered to cover a massive infrastructure proposal is the possibility of a road mileage tax.
Since the US $ 1.9 trillion COVID Relief Act was passed, there has been talk of a multi-trillion US dollar spending plan for infrastructure.
Buttigieg said, “When you think of infrastructure, this is a classic example of the type of investment that comes out of that investment. This is one of many reasons we think this is so important. This is both a job vision and an infrastructure vision, a climate vision, and more. “
One way to pay for it could be to tax drivers for every mile they drive.
“What is called a vehicle mileage tax, or whatever you want to call it, could be one way to do that,” Buttigieg said.
“I hear a lot of appetite that there are sustainable flows of funding.”
Biden is due to travel to Pittsburgh next week to come up with an estimated $ 3-4 trillion proposal. During his first press conference on Thursday, he said that “physical and technological” infrastructure would be his next big initiative.
Biden will detail his plans for a potentially $ 3-4 trillion infrastructure bill in a speech next Wednesday in Pittsburgh, and this will remain the White House’s top priority for weeks to come: //t.co/ QIk9dmmkqO
– POLITICAL (@political) March 26, 2021
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Biden’s infrastructure plan
Biden’s infrastructure plan could include:
Clean Energy and 5G Rural Broadband Development One million “affordable and energy efficient” homes are spending $ 1 trillion on roads, bridges, electric vehicles, railroads and network improvements.
President Biden plans to spend another $ 3 trillion on “infrastructure” and “climate change”.
How does he pay for it?
By increasing your taxes.
– Rep.Jim Jordan (@Jim_Jordan) March 23, 2021
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Build America Bonds?
Another potential source of funding that Buttigieg and the president might consider is an Obama-era idea called Build America Bonds.
According to CNBC, it is a special class of municipal bonds where interest costs are subsidized by the US Treasury Department.
The federal government used this in the rescue phase in 2008 and allowed it to expire in 2010.
Buttigieg also mentioned the idea of a national infrastructure bank.
A mile-based tax looks promising, @SecretaryPete says of funding President Biden’s infrastructure package. The revenue generation will most likely come from different sources. “We have to think big; it has to be transformative.” https://t.co/QY1JvWXXOA pic.twitter.com/4R2CD6KaZV
– CNBC (@CNBC) March 26, 2021
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Advantages and disadvantages of the kilometer tax
When it comes to pros and cons, there are a few each.
For some, this type of usage tax is fairer. After all, those who use a resource the most should pay more for it, right?
A mileage tax would also include electric vehicle drivers in the mix, as those vehicles do not pay into the freeway trust fund.
On the other hand, many Americans don’t want the government to track a driver’s whereabouts and movements.
There are also issues of fairness. Should people be punished if they live further away from work?
And even for those on the right who prefer use taxes (as opposed to general levies that are paid even if a person does not participate in the services associated with them), the question of federalism may be.
One could prefer a state use tax – after all, the funds go to the streets in their state. But is there any guarantee that the federal government will use the proceeds fairly, or will some areas get more benefits and others stay high and arid?
COVID-19 has proven to many employers that their employees can work from home. At a time when Americans are being vaccinated and feeling safe leaving their homes to physically go to a job, school, etc., a mileage tax could lead many people to work from home as an alternative to Rethink paying for driving.
This can also be a pro-argument for environmentalists. Generally, when you want less of something, you tax it. When you tax travel, you get less of it. That means less vehicle exhaust.
In his comments to the House Transportation and Infrastructure Committee, Buttigieg said, “It is almost universally accepted that a larger recovery requires a national commitment to repair and remodel American infrastructure.”
What do you think?
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