Here’s a novel idea: Considering the high cost of gas these days, the government should raise the gas tax. Sounds too unbelievable?

The Virginia state senators passed a resolution raising the state gas tax another 6 cents.  Though Republicans in the House of Delegates are determined to stop the resolution there, the measure highlights a continuing trend across the country. As crude oil prices spike past $140 per barrel, even the government seems unable to help the problem.

Los Angeles Mayor Antonio Villaraigosa announced Wednesday that he wants a half-cent increase for his city. West Virginia has a planned 6-cent gas tax increase scheduled for January 1, 2009. Even New Jersey, with the nations third lowest gas tax rate, is hesitantly considering a hike.

Governments claim they need the gas money to fund new transportation projects. Lawmakers blame the oil companies for the high prices, and many don’t feel government work should stop just because business “greed” has set a high price.

A look at the statistics though, shows that it’s actually state and federal treasuries who earn more—twice as much over the past 25-years—from tax revenues than the big oil companies do from their profits.  While Exxon and their bandit gang have been earning their billions, the government has been taking in trillions.

Democratic candidate Barack Obama supports the current federal gas taxes, and has called for more corporate taxes on the oil companies themselves. He said earlier this month, “I’ll make oil companies like Exxon pay a tax on their windfall profits and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” though it’s unclear how he’ll keep those companies from passing on their increased costs to the consumer at the pump.

Karl Rove countered Obama further in a Wall Street Journal op-ed June 20. He said that oil companies only make about 8.3-cents in gross profit from each dollar sale. The electronics industry’s 14.5-cent profit per dollar sale and the Microsoft margin at 27.5-cents.

On the flip side of the issue, John McCain has proposed an 18.5-cent cut in gasoline rates and a 24.5-cent cut on diesel fuel, which will bring in less money for the government and hypothetically force it to curb spending.  And ignoring its fellow states, Arkansas voted down a fuel tax increase, instead choosing to issue bonds to fund its road projects.

Tucked away under environmental headings at Reuters.com last Friday was a story and video about a Japanese car that runs on water. Although the idea of a water-powered car has long dwelled in the margins of news reporting (albeit to no avail) the latest effort from Japanese company Genepax offers “real progress” on what has long been a fruitless dream.

Engineering specifications are in short supply for the car, though speculation is not. Genepax itself claims that their Water Energy System(WES) “produces electricity and heat from water,” and uses “on-board WES for continuous battery charging.” Unfortunately, Genepax offers no specifications to set itself apart from previous water-powered attempts (the Energy System, Mechanism, and Development links at their website are under construction). The two-year-old company runs on a reported budget of just under $400,000, with an office in Osaka and Tokyo, but little else is known about them.

Skepticism and doubt weren’t far behind the reports on Friday. Slashdot.org writes, “What’s scary is the uncritical, even serious-sounding, presentation by Reuters of such extraordinary claims quite unbacked by extraordinary evidence.” If energy from water were really possible, argues the writer, not only would the car be a bigger story, but other lines of water-powered products would be not far behind. Indeed technology to replace oil with water would be a very significant finding—worth at least front-page treatment.

However, for all the conversation about Genepax—whether hopeful or doubtful—one question has not yet been raised. Is water dependency really preferable as a long-term solution to oil dependency? Water is in vast abundance on Earth, argue the proponents of Genepax—but water is also needed in a vast variety of functions. Depleting the world’s oil supply would lead to a serious economic crunch and perhaps the decline of modern civilization, but depleting the water supply would lead to the end of life on Earth.