Analysis: Payments to Biden's infrastructure program, not drivers and passengers

President Joe Biden's plans to spend billions of dollars on crumbling U.S. roads and mass exits include new money-making companies


US President Joe Biden delivers his speech after a meeting with his team of COVID-19 Response on the new coronavirus disease (COVID-19) and the state of vaccinations, on the White House campus in Washington, US, March 29 , 2021. REUTERS / Jonathan Ernst / Image File

Biden will unveil more details on the first phase of the $ 4 trillion infrastructure project, in Pittsburgh on Wednesday.

Business groups and lawmakers on both sides of the issue have been demanding that Biden raise U.S. fuel taxes, some of the lowest in the world, for the first time since 1993. They are also looking for a new mileage tax that will sweep electric vehicles to plug holes in the national highway fund.

But the White House has rejected those views, the U.S. Secretary of Transportation said. Pete Buttigieg told CNN on Monday. Electricity taxes are politically dangerous and can be very heavy on low-income Americans, who often travel long distances to get to work.

Instead, Biden is expected to propose the largest tax increase in decades, according to two sources familiar with the plan. It includes raising corporate income tax return to 28% applicable before the 2017 tax law, and raising the average tax rate for the highest earners, according to two sources familiar with the scheme.

White House aides say Biden could also rely on a government loan to finance the package, given the historically low interest rate.

Whatever the plan, it is likely to provoke a heated debate between Republicans, Democrats, economists and academics about how best to close the gaps in the U.S. economy. Opened by a large spread of COVID-19.

"The president has a plan to renovate our country's infrastructure… and has a plan to pay for it," White House journalist Jen Psaki said on Monday. If members of Congress do not like you, "we are happy to consider their proposals," added Psaki.

IMMENSE SYSTEM U.S. HIGHWAY The highway system of almost 50,000 countries here) was considered one of the lowest infrastructure projects at the time of its construction. But the national piggy bank to fund road and mobility projects since 1956, the Highway Trust Fund, has been in the red since 2008.

Congressism budget forecasters warn that there could be a $ 207 billion deficit by 2031 without new sources of revenue.

The fund is funded by 18.4 percent of the petrol tax and 24.4 diesel taxes, both of which have not matured for nearly three decades, as well as improved fuel efficiency rates.

That makes gasoline cheaper. German drivers pay $ 6.12 per gallon of gasoline in 2019, compared to $ 2.87 in the United States, according to the Peter G. Peterson Foundation. In Britain, taxes are 63% on petrol prices, compared to 19% in the United States.

Biden has vowed not to raise taxes on Americans earning less than $ 400,000 a year, which includes the vast majority of the country.

Influential trade groups, including the U.S. Chamber of Commerce, has failed to convince lawyers to raise fuel taxes to pay for roads. "We believe in a user-friendly program for roads, bridges and transportation," said Ed Mortimer, its vice president of Transport and Infrastructure.

Senate committee members John Barrasso, of Wyoming, and Chuck Grassley, Iowa, have proposed the idea of ​​combining fuel taxes with inflation and the national electric car to pay for five years, $ 287 billion demanded last year.

The power of U.S. gas tax purchases It has declined by 43 percent since 1993 due to inflation, according to the Peter G. Peterson Foundation.

Some form of financial compromise is required.

"If the White House and the authorities can't get an agreement with the Highway Trust Fund, then it doesn't look good in the whole package," said Quincy Krosby, chief marketing officer at Prudential Financial, who specializes in transportation finance.


Biden is expected to ignore calls from law enforcement agencies for a new way of taxing drivers based on how far they drive, not how much fuel they use, a third source familiar with the program told Reuters.

The mileage traveled, or VMT, tax will mean that electric car owners help pay for national infrastructure and help eliminate rising levels of fuel efficiency which has led to declining portfolio revenues.

About 2% of cars sold in the United States by 2020 were electric, according to S&P Global Platts. The Biden system requires a nationwide network of charging stations, but there is no additional tax for the drivers of those vehicles.

"We are donating tax money to electric vehicles, so there seems to be a problem with paying taxes," said a Democratic Alliance law aide who held the talks.

VMT tax can take years to become fully operational, but it has two supports. "As a conservative, I strongly believe in the principle of user compensation, and I believe we need to start by making sure that all users pay their fair share on the roads they use," said Sam Graves, a Republican on the House. Transport and Infrastructure Committee.

The chairman of the committee, Peter A. DeFazio, a Democrat from Oregon, has supported the increase in electricity tariffs but also wants to provide seed money to try the VMT program, which he calls inevitable.