Money and the Economy

Does Biden’s Infrastructure Bill Include a Mileage Tax or Driving Tax?

Here’s a dismaying prospect: Paying 6, 8, or 10 cents in new taxes for every mile you drive. It may sound small, but at an 8 cent rate, that would be $1,144 in new annual taxes for the average American, who drives about 14,300 miles a year. Yikes!

Some on social media are claiming that this punitive tax scheme has been slipped into President Biden’s $1.2 trillion infrastructure spending legislation—which, after all, is nearly 3,000 pages and is chock full of unrelated waste and partisan pet projects. But are they right to be concerned about a mileage tax soon becoming reality? 

No. At least, not yet.

The infrastructure legislation does not include a mileage tax or another form of driving tax. What it does include is a pilot program to study and test the idea. The legislation authorizes $125 million in taxpayer funding for this test initiative. (A lot of taxpayer money for an experiment, no?)

“People would volunteer to be part of the test,” fact-checkers at local New York news outlet WGRZ-TV report. “The test would require volunteers to record their miles, pay the fees, and then be reimbursed by the government. This pilot program would go through the year 2026 and at that point, if Congress and the president like it, they would have to pass another bill making it into law. This infrastructure bill simply creates the program.”

We can certainly question the wisdom of this endeavor. But rest assured that if the infrastructure legislation ultimately passes—a likely if not certain outcome—you won’t get a new per-mile bill from the IRS. However, this move does represent a shift toward mainstreaming and advancing the idea of a per-mile driving tax.

Such a tax would be highly regressive, meaning that it would disproportionately burden low-income Americans. So, too, the costs would fall harder on rural Americans who drive more than their city-dwelling counterparts. That said, proponents argue it simply funds highway infrastructure by taxing those who use it. They also note that it could replace the gas tax, which currently attempts to do the same yet fails to capture usage by electric vehicles.

Still, the prospect of sizable new taxes levied on working-class Americans solely for the privilege of being allowed to drive your own car isn’t an attractive one. Luckily, we aren’t actually facing this as an immediate reality, even if it is slowly being advanced into the mainstream.

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This article was originally published on FEE.org

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