Fact Check

A Mileage Tax? No, Biden's Bill Doesn't Impose New Driving Tax

Studying a tax is not the same as implementing a tax.

Published Oct. 1, 2021

 (Image by andreas160578 from Pixabay )
Image courtesy of Image by andreas160578 from Pixabay
Claim:
President Joe Biden's Build Back Better bill/plan will establish a driving mileage tax.
Context

U.S. President Joe Biden's Build Back Better plan does not impose a new mileage tax on drivers. However, as tax revenue from gasoline purchases continues to fall, the plan does call for the establishment of a voluntary pilot program to study the potential impacts of a driving tax.

A persistent rumor in the summer of 2021 was that somewhere buried in United States President Joe Biden's Build Back Better plan was a hidden tax that was about to make driving much more expensive. In September, for example, the following messages were posted on social media claiming that Biden was implementing a new mileage tax:

A screenshot from a broadcast on the conservative news channel Newsmax was also circulated on social media:

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Biden's Build Back Better plan does not impose a new mileage tax. These rumors appear to be based on a misinterpretation of a section of the Infrastructure Investment and Jobs Act that is currently (as of October 1, 2021) making its way through Congress. The infrastructure bill does not impose a mileage tax. Rather, this bill proposes a "national motor vehicle per-mile user fee" pilot program to study the impacts of a mileage tax.

In other words, this bill will does not implement a new mileage tax. This bill provides funding to study the impact of such a tax. A mileage tax may or may not be implemented after this voluntary pilot program concludes in 2026.

Andy Winkler, director of infrastructure projects at the Bipartisan Policy Center, told The Associated Press: “It is not a tax, it is not on everybody and it is voluntary."

Why Study a Mileage Tax?

One of the purposes of this pilot program to explore alternative revenue streams to fund surface transportation programs. At the moment, the Highway Trust Fund is largely funded by taxes on gasoline and diesel fuel purchases. With the rise of electric vehicles, cars with better miles per gallon, and decreased personal travel during the COVID-19 pandemic, revenue from the gas tax has declined.

One solution to this funding problem is to raise taxes on gasoline purchases. The state of Missouri, for example, just increased the state's gas tax for the first time since the 1990s. Another option would be to shift the burden of funds from the amount of gas a person uses to a person's actual mileage. Back in March 2021, Transportation secretary Pete Buttigieg said:

“If we believe in that user-pays principle—the idea that how we pay for roads is based on how much you drive—the gas tax used to be the obvious way to do it. It’s not anymore. A so-called VMT tax or mileage tax, whatever you want to call it, could be a way to do it.”

While proponents of a mileage tax argue that it's a fair tax, as it will tax people based on how much they use the roads, opponents have argued that this tax could impact people in rural areas more as they typically have to drive longer distances. Others have also raised privacy concerns, questioning how a person's mileage use would be calculated.

For the moment, the Biden administration is not implementing a new mileage tax. However, the infrastructure bill does include a pilot program to study the impacts of a mileage tax.

Sources

Boesen, Ulrik. “Gas Tax Revenue to Decline as Traffic Drops 38 Percent.” Tax Foundation, 31 Mar. 2020, https://taxfoundation.org/gas-tax-revenue-decline-as-traffic-drops/.

“Fact Check: Infrastructure Bill Wouldn’t Impose ‘driving Tax’ of 8 Cents per Mile.” Usatoday, https://www.usatoday.com/story/news/factcheck/2021/09/30/fact-check-no-driving-tax-8-cents-mile-infrastructure-bill/5928257001/. Accessed 1 Oct. 2021.

Franck, Thomas. “Vehicle Mileage Tax Could Be on the Table in Infrastructure Talks, Buttigieg Says.” CNBC, 26 Mar. 2021, https://www.cnbc.com/2021/03/26/buttigieg-says-white-house-is-weighing-mileage-levy-to-fund-infrastructure.html.

Friedman, Zack. “Infrastructure Package Includes Vehicle Mileage Tax Program.” Forbes, https://www.forbes.com/sites/zackfriedman/2021/08/11/infrastructure-package-includes-vehicle-mileage-tax-program/. Accessed 1 Oct. 2021.

It’s Been 28 Years Since We Last Raised the Gas Tax, and Its Purchasing Power Has Eroded. https://www.pgpf.org/blog/2021/03/its-been-28-years-since-we-last-raised-the-gas-tax-and-its-purchasing-power-has-eroded. Accessed 1 Oct. 2021.

“Mileage Tax Study, Not Actual Mileage Tax, Proposed in Infrastructure Bill.” AP NEWS, 29 Sept. 2021, https://apnews.com/article/fact-checking-907285011746.

“Missouri’s First Gas Tax Increase since the 1990s Goes into Effect Friday.” FOX 2, 30 Sept. 2021, https://fox2now.com/news/missouri/missouris-first-gas-tax-increase-since-the-1990s-goes-into-effect-friday/.

Status of the Highway Trust Fund | Federal Highway Administration. https://www.fhwa.dot.gov/highwaytrustfund/. Accessed 1 Oct. 2021.

“The Build Back Better Agenda.” The White House, https://www.whitehouse.gov/build-back-better/. Accessed 1 Oct. 2021.

“The Gas Tax Was Already Broken. The Pandemic Could End It.” Smart Cities Dive, https://www.smartcitiesdive.com/news/the-gas-tax-was-already-broken-the-pandemic-could-end-it/587653/. Accessed 1 Oct. 2021.

Dan Evon is a former writer for Snopes.