California’s ‘Money-Grabbing Politicians’ Defend New Mileage Tax Buried in 2025 Budget Bill

Assemblyman Carl DeMaio reports that California Democrats just killed his bill to ban the imposition of a new MILEAGE TAX on drivers!

“WATCH as these money-grabbing politicians defend charging YOU 6-cents per mile – or $900 per year on top of gas/car taxes!” DeMaio says:

BREAKING: CA Democrats just killed my bill that would ban the imposition of a new MILEAGE TAX on drivers! WATCH as these money-grabbing politicians defend charging YOU 6-cents per mile – or $900 per year on top of gas/car taxes! pic.twitter.com/Nv3unMEnOt

— Carl DeMaio (@carldemaio) April 21, 2026

Democrats plan to charge drivers for driving anywhere.

DeMaio’s bill, AB 1783, would have prohibited local governments from imposing a mileage tax, which was buried in the Governor’s Budget trailer bill last year. And would prohibit a state agency from spending funds for the study, planning, or administration of a tax, fee, assessment, or charge based on VMT.

According to Assemblyman DeMaio, “Californians continue to be some of the most taxed people in the United States, with countless taxes in every aspect of life. As the cost-of-living crisis continues to grow, it is imperative that measures to create new taxes or increase taxes be stopped, whether statewide or at the local level. Californians pay the highest gas tax and car tax in the nation, and those funds are regularly diverted, preventing proper maintenance and repair of our roads. With local jurisdictions looking to impose mileage taxes, it is essential that Californians are financially protected from another misleading tax.”

The statewide Vehicle Miles Traveled (VMT) mitigation bank created by AB 130 in 2025 within the State Budget, “is an optional tool for developers to address significant Vehicle Miles Traveled impacts under the California Environmental Quality Act. Developers can pay into the state’s Transit-Oriented Development (TOD) Implementation Fund (administered by HCD) instead of (or in addition to) other on-site or local mitigation measures. The fund supports affordable housing and related infrastructure in location-efficient areas to theoretically offset driving increases,” the Governor’s Land Use and Climate Innovation website says.

Contributions to this fund start in July 2026.

DeMaio says if a six- cent mileage tax is imposed, that’s approximately an extra $900 per year for driving an average of 15,000 miles.

A nine-cent mileage tax has been floated, which would add up to $1,350 for an average of 15,000 miles driven annually.

DeMaio said the taxes just for driving in California could add up to a total of $5,000 for a two-car family.

It gets worse because this new auto tax is on top of the gas taxes, the car taxes, and the registration fees they already charge you, DeMaio said. Every mile you drive, Democrats will tax.

The list of gas taxes in California is huge, totaling $4.34, according to the California Energy Commission.

California’s taxes on a tank of gas is the highest in the nation, according to the commission.

Effective July 1, 2025, the main taxes and fees on a gallon of gasoline in California are approximately as follows:

• Federal excise tax: 18.4 cents per gallon. This has been unchanged since 1993 and applies nationwide. 
• California state excise tax (Motor Vehicle Fuel Tax): 61.2 cents per gallon. This is indexed to inflation and adjusted annually on July 1; it rose from 59.6 cents effective July 1, 2025. It funds roads, highways, and transit.
• State and local sales tax: 10–15+ cents per gallon. Varies by location (statewide base around 7.25% plus district taxes); for fuels, it’s often applied as a prepayment rate or percentage on the selling price (excluding some excise taxes). An average or effective rate for calculations is sometimes shown around 2.25% in certain breakdowns, adding roughly 10–15+ cents per gallon depending on the retail price and exact location. 
• State Underground Storage Tank (UST) maintenance fee: About 2 cents per gallon. This funds cleanup of leaking tanks and is paid by tank owners/operators but passed through in prices.

These are regulatory compliance or program costs passed on to consumers (not traditional taxes but frequently broken out in price analyses):

• Cap-and-Trade (Cap and Invest): Roughly 20–35+ cents per gallon (varies with carbon allowance prices).
• Low Carbon Fuel Standard (LCFS): Roughly 15–25+ cents per gallon (varies; proposals could increase this further).

These environmental program costs can add $0.40–0.50+ per gallon or more in some estimates, contributing to California’s higher pump prices alongside its unique reformulated gasoline requirements.

Total direct taxes/fees (federal + state excise + UST + average sales tax component): Around 70–90+ cents per gallon in combined state taxes/fees (highest in the U.S.), with broader estimates including federal reaching nearly $0.90/gallon. Exact totals vary by retail price (due to sales tax) and location, according to the California Department of Tax and Fee Administration. 

Governor’s Land Use and Climate Innovation website,  described as a “New Tool for Housing and Infrastructure : California’s Statewide VMT Mitigation Bank.”

“Providing another option for California Environmental Quality Act (CEQA) projects to mitigate vehicle miles traveled (VMT) impacts by helping to fund location-efficient affordable
housing and related infrastructure projects,” the slick website says.

It’s just another awful tax.

DeMaio has some clever X followers, who weighed in on this new mileage tax:

“The Constitution assumes a free republic where citizens can move about their own country without petty tyrants erecting tollbooths on basic mobility or turning roads into a surveillance-financed subscription service.”

“CA state government is already failing spectacularly at its core job (delivering decent roads for the insane taxes collected). Yet, now it want to pile on a new tracking-based fee/mileage tax.” 

“As a Californian, I’m sick of being treated like a cash cow that exists only to be milked harder while the barn falls down.”

“The barn falling down while they demand more rent,” DeMaio replied. “That is California in one sentence. They cannot fill a pothole but they want to charge you by the mile for the privilege of driving on roads you already paid for.”

“Keep in mind this is a poor tax. Wealthy people will never notice it but it will seriously harm commuters who already cant afford to leave closer to the places they work.  California being a tourist state has many many towns where this is the case.”

Here is what else the Governor’s Land Use and Climate Innovation website says about the mileage tax – it’s all about the environment:

Practical Mitigation Option: Gives CEQA projects an additional viable option to offset their VMT impacts.

Greater Certainty in CEQA: Creates a predictable pathway to reduce VMT impacts to less-than-significant levels, streamlining
environmental review (e.g., Mitigated Negative Declaration instead of a full Environmental Impact Report).

Long-Term Investment in Housing and Climate Goals: Establishes a sustainable financing mechanism that unlocks long-term investment into affordable housing and related infrastructure in a manner that is consistent with California’s climate goals.

The California Transportation Commission claims the state and local communities are facing a $31 billion shortfall over the next 10 years due to declining gas tax revenues. Maybe they should have thought about that before forcing electric vehicles and an all-electric grid on California residents. So this new tax is proposed to close this gap.

According to AB 1783 bill analysis:

State transportation funding is primarily supported by six different fuel taxes and vehicle fees. These sources are projected to generate $14.4 billion in 2024-25 as shown in the figure below. In recognition of the increased need for additional funding to maintain California’s transportation infrastructure, in 2017, the Legislature passed SB 1 (Beall), Chapter 5, Statutes of 2017, the Road Repair and Accountability Act (SB 1). SB 1 is forecast to provide roughly $6 billion in 2023-24 for road maintenance and additional funding for transit and safety projects. SB 1 also provided for an annual adjustment for inflation.

It’s just another tax to offset Democrats’ ever-increasing spending and perpetually growing budget, currently at a bloated $325 billion.