In an almost week-old interview on CNBC, Secretary of Transportation Pete Buttigieg can hardly hold in his glee talking about a new potential mileage tax. The mileage tax was floated by Buttigieg as a commonsense proposal to help fund more than $3 trillion in national infrastructure spending. A mileage tax, “I think that shows a lot of promise, declared Buttigieg. “If we believe in that so-called user-pays principle, the idea that part of how we pay for roads is you pay based on how much you drive.” The proposal sounds fair until one engages in some rudimentary critical thinking.
A mileage tax disproportionally punishes rural America and those that can’t afford to live in bigger cities or are in a position to work from home like many white collar professionals packed into suburban and urban enclaves. Furthermore, North Carolina, per-capita, is one of the most rural states in the country and would be disproportionally impacted by the new tax scheme. People who live in rural areas not only live farther from work, but they tend to live much farther from grocery stores and other retail outlets, as well. It’s hard to ignore how unfair the proposal happens to be for many that are already disconnected from an economy that tends to benefit those in the urban centers.
Another purpose of a mileage tax is to force electric drivers to pay their fair share of road use since the tax on gasoline is already an indirect mileage tax. Yet, shouldn’t the government phase out tax credits incentivizing electric cars if revenue is a major concern? Complaining about lost revenue from vehicles the government is now incentivizing seems dubious at best.
However, if a mileage tax is implemented, will the federal government then scrap the federal gas tax? Will states follow suit in scrapping one regressive tax for another? This seems unlikely given that the federal government and many state governments are starving for revenue under status quo spending binge policies. The federal debt alone is now over $28 trillion. Republicans and Democrats alike in Washington have done virtually nothing in decades to prioritize spending. It seems unlikely there will be any appetite to give up any revenue sources already long in place.
How will the mileage tax be enforced? Some are already worried that a tracking device could be placed in vehicles or that the federal government could mandate such devices in new vehicle models. Would state and local government agencies be empowered to keep tabs on your mileage for the purposes of taxation through annual safety inspections or tag renewal? Will it require the hiring of more government workers to comply with mileage tracking?
Will long-haul truckers be forced to comply with another mileage tax that will raise the price of food and other consumer goods and services to cover the cost? How much harm will this do to ride-share services that many drivers participate in for income and consumers for convenience? The mileage tax scheme would undoubtedly be a double punishment on poorer Americans and those on a fixed income. Would the solution to their plight be to make an even larger proposal for raising the minimum wage that promotes more inflation and centralized planning?
Already a crumbling pledge, President Biden promised no new taxes for those that make under $400,000. Again, drivers and taxpayers should put more onus on Washington to prioritize the revenue they are already receiving for road infrastructure without a politicized Green New Deal agenda. During a committee meeting on Capitol Hill, Buttigieg told lawmakers that part of the funding will go for climate change initiatives to avert what he predicts is a looming climate catastrophe.
The bigger disaster, though, is another tax scheme that would clearly punish working class Americans. In the interview, Buttigieg added that “some level of deficit spending could make sense.” This in itself signals there is little to no intent to prioritize spending. If the federal government is already failing as stewards of our tax dollars and roadways, does it make sense to willingly hand over even more money?
Ray Nothstine is Carolina Journal opinion editor.