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New tax on number of miles you drive? Incoming Transportation Secretary Buttigieg likes the idea
Incoming Transportation Secretary Pete Buttigieg has suggested taxing Americans for the number of miles they drive, a policy he endorsed as a Democratic presidential candidate.
The Biden Administration is actively searching for ways to fund its ambitious $1 trillion infrastructure plan.
Buttigieg, the former mayor of South Bend, Ind., acknowledged “privacy concerns” related to implementing a vehicle miles traveled (VMT) system but said it should be considered as a potential replacement for the gas tax.
During Buttigieg’s confirmation hearing in the Senate Commerce, Science, and Transportation Committee on Thursday, Florida Republican Sen. Rick Scott asked him if he would support increasing the federal gas tax, which is currently charged to drivers in addition to state gas taxes. The federal gas and diesel tax is the primary source of funding for the Federal Highway Trust Fund.
“I think all options need to be on the table, as you know, the [federal] gas tax has not been increased since 1993, and it has never been pegged to inflation, and it’s one of the reasons why the current state of Highway Trust Fund is that there’s more going out than coming in,” Buttigieg replied. “In the long term, we need to bear in mind also that as vehicles become more efficient and as we pursue electrification, sooner or later, there will be questions about whether the gas tax can be effective at all.”
The state of Virginia has started charging a “highway use fee” to drivers with vehicles that the state government deems “fuel-efficient,” including gas and diesel vehicles. The fee varies based on how fuel-efficient the government determines the vehicle to be, and the government can adjust the tax rate as it chooses.
To implement a VMT system, the federal government would likely have to establish a uniform in-car system for tracking the number of miles a driver travels similar to the EZ-Pass transponder that drivers put in their vehicles to pay tolls.
Incoming Transportation Secretary Pete Buttigieg has suggested taxing Americans for the number of miles they drive, a policy he endorsed as a Democratic presidential candidate.
The Biden Administration is actively searching for ways to fund its ambitious $1 trillion infrastructure plan.
Buttigieg, the former mayor of South Bend, Ind., acknowledged “privacy concerns” related to implementing a vehicle miles traveled (VMT) system but said it should be considered as a potential replacement for the gas tax.
During Buttigieg’s confirmation hearing in the Senate Commerce, Science, and Transportation Committee on Thursday, Florida Republican Sen. Rick Scott asked him if he would support increasing the federal gas tax, which is currently charged to drivers in addition to state gas taxes. The federal gas and diesel tax is the primary source of funding for the Federal Highway Trust Fund.
“I think all options need to be on the table, as you know, the [federal] gas tax has not been increased since 1993, and it has never been pegged to inflation, and it’s one of the reasons why the current state of Highway Trust Fund is that there’s more going out than coming in,” Buttigieg replied. “In the long term, we need to bear in mind also that as vehicles become more efficient and as we pursue electrification, sooner or later, there will be questions about whether the gas tax can be effective at all.”
The state of Virginia has started charging a “highway use fee” to drivers with vehicles that the state government deems “fuel-efficient,” including gas and diesel vehicles. The fee varies based on how fuel-efficient the government determines the vehicle to be, and the government can adjust the tax rate as it chooses.
To implement a VMT system, the federal government would likely have to establish a uniform in-car system for tracking the number of miles a driver travels similar to the EZ-Pass transponder that drivers put in their vehicles to pay tolls.
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