So gas prices went up again, and the press relays complaints about how it is the taxes that keep prices high. These voices ask that tax be reduced to bring relief to hard working Americans. How wrong they are.
Gas is taxed for three reasons: 1) because it is easy revenue: the tax needs to be levied at only few resellers; 2) because it penalizes adverse behavior in the sense that using gas pollutes (it exerts a negative externality on others); 3) the tax is a proxy for paying the use of a public good: roads.
Let me be more specific.
Whenever you tax, there is going to be some dead weight. Setting up the appropriate administrative structure, collecting the taxes and chasing evaders all imply costs. Compared to income tax or sales tax, the gas tax is incredibly efficient, as you can levy the tax at the level of the refineries.
Whether you believe in global climate change or not, everyone will agree that using gas will exert some externality on others. That can be pollution, but also contributing to congestion on roads. The idea is to make the user pay for the externality so that he changes his behavior to factor in this externality. As demand for gas is quite inelastic (reacts little to price changes), this can be quite substantial.
Gas use can also be a proxy for the use of some public goods. Driving on public roads is the perfect example, but think also about the cost of diplomacy/foreign aid/wars to secure oil imports. Someone has to pay for all this, and the best is to make the user pay. Road use would be best paid according to some monitoring of mileage, but gas use is the best proxy we have. In this regard, road use in the United States is currently subsidized, as the gas tax does not cover all of the costs of road construction and maintenance.
You may criticize the high-tax ways of Europe, but here the latter is dead right: with taxes at $5-6 a gallon, they are about right in pricing the externalities. In the US, externalities may be lower, as there is less density and thus congestion, and more land to absorb pollution. A $3 tax per gallon should entirely reasonable. It can be introduced gradually, say 5 cents a month over a five year period. And do not tell me the voters are against such tax increases, they actually favor it (pdf), as long as the revenue displaces some other tax like the income tax. This makes perfect sense, as a gas tax discourages a bad, while income tax discourages a good.