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Time to hike the federal gas tax?

Now that it looks like BP might be actually making progress on shutting down the oil pouring from the damaged Deepwater Horizon rig, we can't let our cautious optimism get the better of us.

Yes, the cap is on and the pressure readings are, so far, encouraging.

A camera from a Remote Operated Vehicle shows part of the oil collection system being installed to control British Petroleum's Deepwater Horizon Oil Spill on July 12, 2010. Officials hope a new cap will collect all of the spewing oil. UPI/BP Photo via Newscom

The relief wells to permanently plug the oil source are being drilled. Or work on the additional wells will resume as soon as engineers are confident that the cap will hold while the ancillary drilling is done.

But there's still a whole lot left to do as far as cleaning up the worst oil spill in U.S. history.

Sure, BP is going to bear the brunt of the cleanup costs. That's the very least the company can do.

But in the wake of this catastrophe, some folks are asking if all of us who consume so much of what's pumped out of the earth shouldn't contribute, too.

Time for a fuel tax hike: A recent Washington Post editorial examined what it calls a tax truth: We need to raise the levy on gasoline.

I know that when gas prices were nudging $4 a gallon a couple of years ago, people were apoplectic. Politicians were calling for a fuel tax holiday. Drivers were heading to dealerships to buy more fuel-efficient cars. Then things went back to what we consider normal. 

Gasoline prices are again relatively low.

And a big reason for our cheap gas, notes the Post editorial, is "the erosion of gas taxes. The federal tax of 18.4 cents per gallon has not gone up since 1993 -- meanwhile losing a third of its value in real terms. State taxes are about 30 cents per gallon on average, but they, too, have barely risen lately. In real terms, Americans spend just $19 on gas taxes per 1,000 miles driven -- half of what they paid in 1975, according to a recent report in USA Today."

Essentially, says the paper, "We're driving more miles but paying less for the privilege. Small wonder that alternative-fuel vehicles struggle in economic competition with the internal combustion engine."

Adding to the argument for higher gas taxes is the fact that our roads are getting worse. The main reason for the highway decay? Not enough tax money to pay for the repairs.

I know we're in a time of extreme anti-tax sentiment. And it's an election year, meaning politicians won't even think of raising taxes.

But when folks finally face reality, the gas tax is one that deserves serious consideration. I discuss this option in my Bankrate Taxes Blog item Hike the gas tax to clean the Gulf.

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Interesting how it's all relative. Gas now feels reasonable especially in comparison to the bad summer we had 3 years ago.
One point - I recall when I started working out of college in 1984, paying $1.25 for gas. Run that number through an inflation calculator and it would be $2.55 in 2009, exactly where gas is today in my area.

When gas was hitting $4, we heard about solar power and electric cars. Now, not so much.

As we see, from cigarettes, alcohol, and soon sugar, and fat, the government can decide which sins to tax or credit in order to impact their demand. These taxes are somewhat regressive, no? If gas were free, I'd not drive any more, and if you doubled the price, I'd not drive less, but those in a lower income bracket might have issues with this.

On the flip side, I think it may be a means to an end. A gas tax that really keeps up with road repair and creates an electric car subsidy may jump us to a better world years hence.

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