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Drive a lot? You may pay higher taxes under one possible Biden plan

March 26, 2021, 4:18 PM UTC

Heavy drivers could see their tax bills go up as the White House prepares to roll out its extensive infrastructure proposals.

Transportation Secretary Pete Buttigieg told CNBC Friday that the government is considering many options, including a mileage tax, which would assess charges based on how far people travel, rather than how much gas they use.

The move comes as the push to move to electric cars grows stronger. Gas taxes have become less effective as mileage increases in new models and hybrid vehicles travel much further on a single tank.

A mileage tax “shows a lot of promise 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,” said Buttigieg.

The plan, if enacted, could have significant implications on the income of independent contractors in the transportation industry, especially truck drivers, Uber and Lyft gig workers and delivery workers.

Biden’s infrastructure plan is expected to propose up to $3 trillion in new spending. White House officials have considered breaking the proposal into two smaller bills to increase the chances of getting it through Congress.

Dubbed the “Build Back Better” agenda, the plan features improvements ranging from building and improving roads, bridges, railways, ports, and the electrical grid to investments in infrastructure, clean energy, manufacturing, and growth-industries like super-fast 5G mobile technology.

Biden also hopes to provide free community college, universal pre-kindergarten education, national paid leave, and reduced child care costs.

Senate Republicans and business groups that have supported the plan both say they have no interest in increasing taxes to pay for the improvements.