Although President Biden repeatedly objected to a national gas tax hike to fund the bipartisan infrastructural package, the $1 trillion bill unveiled by the Senate this week includes a national motor vehicle per-mile user fee pilot program that may violate one of his biggest “red lines.”
For months, White House officials argued that letting the federal gasoline tax rise at the rate of inflation broke his campaign promise to not hike taxes for any American who earned less than $400,000. The federal gas tax, which pays for the Highway Trust Fund, has remained at 18.4 cents a gallon since 1993 and has not kept up with inflation or the growing presence of fuel-efficient vehicles.
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“The president has been clear throughout these negotiations: He is adamantly opposed to raising taxes on people making less than $400,000 a year,” White House spokesman Andrew Bates said in mid-June. “After the extraordinarily hard times that ordinary Americans endured in 2020 — job losses, shrinking incomes, squeezed budgets — he is simply not going to allow Congress to raise taxes on those who suffered the most.”
Despite that pledge, the Infrastructure Investment and Jobs Act – which senators could pass as soon as this week – leaves open the possibility of a tax that’s tethered to personal vehicle mileage. The pilot program, outlined in section 13002 of the bill, would charge users based on vehicle miles traveled.
The 2,702-page bill directs Treasury Secretary Janet Yellen and Transportation Secretary Pete Buttigieg to provide recommendations to Congress within three years of the pilot program’s establishment, at which point lawmakers could choose whether or not to pass new legislation taxing miles-per-vehicle in order to fund the infrastructure overhaul.
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The program would target passenger motor vehicles, light trucks and medium- and heavy-duty trucks, while fees would likely vary between vehicle types and weight classes “to reflect estimated impacts on infrastructure, safety, congestion, the environment, or other related social impacts.”
“The Secretary, in coordination with the Secretary of the Treasury, and consistent with the recommendations of the advisory board, shall establish a pilot program to demonstrate a national motor vehicle per-mile user fee to restore and maintain the long-term solvency of the Highway Trust Fund and to improve and maintain the surface transportation system,” the bill text reads.
The White House did not immediately respond to a FOX Business request for comment.
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The infrastructure bill includes about $550 billion in new funding for roads, bridges, rail, transit, water and other “traditional” infrastructure programs.
It will be paid for by repurposing unspent coronavirus relief funds, along with recouping fraudulently paid unemployment money, unemployment money returned by states that prematurely ended a federal $300-a-week benefit, targeted corporate users fees, strengthened tax enforcement for cryptocurrencies and economic growth created by the investments.