Biden's infrastructure plan will avoid hiking gasoline tax, vehicle miles fee

WASHINGTON (REUTERS) – US Transportation Secretary Pete Buttigieg said on Monday (MArch 29) the White House will not propose hiking gasoline taxes or a new vehicle miles travelled (VMT) fee to pay for a proposal to massively boost infrastructure spending.

Mr Buttigieg told CNN a vehicle miles travelled fee is “not part of the conversation about this infrastructure bill”.

Mr Buttigieg has previously spoken about the idea of a VMT but has acknowledged it faces challenges regarding privacy and technology.

He also told CNN a gas tax hike is not under consideration.

“I want to reiterate the president’s central commitment here. If you’re making less than US$400,000 (S$540,000) a year, this proposal will not involve a tax increase for you,” he said.

Earlier, the White House said President Joe Biden will outline on Wednesday how he would pay for his US$3 trillion to US$4 trillion plan to tackle America’s infrastructure needs, a proposal likely to include tax increases first laid out on the campaign trail.

Congress has not boosted the 18.4-cents-per-gallon federal gasoline tax since 1993.

The federal government has abandoned a decades-old policy of largely using fuel tax revenue to fund infrastructure repairs.

Since 2008, Congress has transferred US$154 billion to the Highway Trust Fund, including US$13.6 billion in the current budget year. Congress failed again last year to approve a multi-year surface transportation bill and instead passed a one-year extension that expires on Sept 30.

Some lawmakers think a VMT makes sense in order to collect road repair funds from electric vehicles that currently do not pay federal gas taxes.

US Representative Peter DeFazio, chairman of the House Transportation and Infrastructure Committee, told Reuters in a recent interview that adopting a vehicle miles-travelled fee to pay for infrastructure before the Sept 30 highway funding deadline is not realistic.

“The president has a plan to fix the infrastructure of our country … and he has a plan to pay for it,” White House spokeswoman Jen Psaki told reporters on Monday.

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