Secretary Pete backtracks on a mileage tax as funding for the infrastructure bill

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Ayelet Sheffey
·2 min read
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Pete Buttigieg
Secretary of Transportation Pete Buttigieg. John McDonnell/The Washington Post via Getty Images
  • Transportation Secretary Pete Buttigieg ruled out the idea of a mileage tax to fund infrastructure.

  • This came three days after he said a mileage tax "shows a lot of promise."

  • Biden is set to unveil the first part of his infrastructure plan on Wednesday.

  • See more stories on Insider's business page.

President Joe Biden's infrastructure plan could reportedly cost up to $4 trillion, and Transportation Secretary Pete Buttigieg has alternately been musing about and dismissing a mileage tax to help fund it.

In a CNBC interview on Friday, Buttigieg said that while sources of funding for infrastructure are still being discussed, a mileage tax "shows a lot of promise" as a source of funding for Biden's next massive bill. However, he shut down the idea of a mileage tax just three days later in an interview on CNN.

"That's not part of the conversation about this infrastructure bill," Buttigieg said on Monday. "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."

Buttigieg also ruled out the idea of using a gas tax to fund infrastructure plans, but he hasn't yet discounted another idea he brought up on Friday: reviving Obama-era Build America Bonds.

Biden is set to unveil his infrastructure proposal on Wednesday, which will consist of two legislative pieces: the first, which will be officially introduced on Wednesday, will focus on rebuilding the country's roads, bridges, building electric vehicle infrastructure, and more, and the second, which will be introduced in April, will focus more on the care economy, like funding universal pre-K and free community college.

While the plan was initially thought to have a $3 trillion price tag, The Washington Post first reported on Monday that it could cost as much as $4 trillion, with $3.5 trillion in tax hikes.

Some lawmakers, like moderate Democratic Sen. Joe Manchin of West Virginia, already expressed support for using tax hikes to fund infrastructure. In fact, Manchin told Axios earlier this month that an infrastructure bill could be as large as $4 trillion if it was funded by tax hikes.

But Republican lawmakers are unlikely to support tax increases to pay for infrastructure spending, with some of them having already called for a repeal of the estate tax, which only affects the wealthiest households.

"I don't think there's going to be any enthusiasm on our side for a tax increase," Senate Minority Leader Mitch McConnell told reporters last week.

Read the original article on Business Insider