Trump signals he's open to mileage tax with praise of Oregon program

WASHINGTON, Feb 21 (Reuters) - The White House on Wednesday praised an experimental program in Oregon that charges a mileage tax to volunteer drivers, adding to signals that President Donald Trump is open to finding new revenue sources to pay for his proposed infrastructure program.

Many of Trump's fellow Republicans, however, dislike the idea of a transportation tax as it would go against the grain of the party's push to lower taxes and could hit Republican-leaning rural areas harder than cities.

In the annual Economic Report of the President, the White House described Oregon - a Democratic-leaning state where environmental issues are a priority for many voters - as a "pioneer" in transportation funding and highlighted its funding initiative, which began in 2015.

RELATED: President Trump's January 2018 approval ratings by state

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President Trump's January 2018 approval ratings by state
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President Trump's January 2018 approval ratings by state

Alabama - 63 percent

Source: Morning Consult

Alaska - 48 percent

Source: Morning Consult

Arkansas - 53 percent

Source: Morning Consult

Arizona - 53 percent

Source: Morning Consult

Connecticut - 39 percent

Source: Morning Consult

California - 36 percent

Source: Morning Consult

Colorado - 41 percent

Source: Morning Consult

Delaware - 41 percent

Source: Morning Consult

Delaware - 50 percent

Source: Morning Consult

Delaware - 41 percent

Source: Morning Consult

Hawaii - 30 percent

Source: Morning Consult

Iowa - 43 percent

Source: Morning Consult

Illinois - 37 percent

Source: Morning Consult

Idaho - 53 percent

Source: Morning Consult

Indiana - 53 percent

Source: Morning Consult

Kansas - 50 percent

Source: Morning Consult

Kentucky - 55 percent

Source: Morning Consult

Louisiana - 57 percent

Source: Morning Consult

Maine - 40 percent

Source: Morning Consult

Massachusetts - 32 percent

Source: Morning Consult

Michigan - 42 percent

Source: Morning Consult

Minnesota - 41 percent

Source: Morning Consult

Mississippi - 42 percent

Source: Morning Consult

Missouri - 42 percent

Source: Morning Consult

Montana - 41 percent

Source: Morning Consult

Nebraska - 51 percent

Source: Morning Consult

Nevada - 47 percent

Source: Morning Consult

New Hampshire - 43 percent

Source: Morning Consult

New Jersey - 40 percent

Source: Morning Consult

New Mexico - 38 percent

Source: Morning Consult

New York - 39 percent

Source: Morning Consult

North Dakota - 53 percent

Source: Morning Consult

Ohio - 46 percent

Source: Morning Consult

Oklahoma - 55 percent

Source: Morning Consult

Oregon - 37 percent

Source: Morning Consult

Pennsylvania - 46 percent

Source: Morning Consult

Rhode Island - 37 percent

Source: Morning Consult

South Carolina - 51 percent

Source: Morning Consult

South Dakota - 53 percent

Source: Morning Consult

Tennessee - 56 percent

Source: Morning Consult

Texas - 51 percent

Source: Morning Consult

Utah - 46 percent

Source: Morning Consult

Vermont - 30 percent

Source: Morning Consult

Virginia - 45 percent

Source: Morning Consult

Washington - 36 percent

Source: Morning Consult

West Virginia - 59 percent

Source: Morning Consult

Wisconsin - 42 percent

Source: Morning Consult

Wyoming - 60 percent

Source: Morning Consult

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Volunteers are charged a fee of 1.7 cents for each mile driven on state roads. In return, drivers get rebates for state fuel taxes. As of the end of 2016, only about 700 people were participating in the program, which is intended to gather data and generate consumer feedback.

"The program offers tangible evidence that a tax on vehicle miles traveled is a promising alternative to relying on fuel taxes," the report said.

Kevin Hassett, chairman of the White House Council of Economic Advisers, described Oregon's mileage tax as "innovative" in a conference call with reporters and made clear the Trump administration was open to looking at ways to raise revenue for infrastructure projects.

Trump last week called for using $200 billion in new federal spending over 10 years in an effort to stimulate $1.5 trillion in infrastructure spending. It would largely see states shoulder most costs and rely on unspecified spending cuts to pay for repairs.

The federal tax of 18.4 cents per gallon of gasoline has not been hiked since 1993. The federal tax on diesel fuel is 24.4 cents a gallon. The money raised from those taxes is used to pay for infrastructure repairs but has failed to keep up with costs as cars became more fuel-efficient.

Hassett said the administration was still looking at the "pluses and minuses" of different ways to pay for infrastructure.

"There's a lot of discussion that will continue to evolve, I’m sure, as the infrastructure legislation moves forward, about how should we pay for this stuff," Hassett said.

In a private meeting with lawmakers last week to discuss infrastructure, Trump expressed support for hiking the federal gasoline tax by 25 cents a gallon, according to Democratic Senator Tom Carper, who attended the meeting.

The report also boosted the idea of driverless cars, estimating autonomous cars "could add more than $200 billion to GDP, 2.4 million jobs and $90 billion in wages to the U.S. labor force" once they account for half of U.S. vehicles. (Reporting by David Shepardson and Roberta Rampton; Editing by Paul Simao)

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