It might effectivly reduce demand.
Now, I’m not endorsing this particular tax proposal, just merely defending the general high tax policies here.
Edit:
I probably spend about $40/month on transportation. I do not own a car and bike to work and most other places. I spend $2700/month (market rate rent, no rent control) for a 1 bedroom apartment in a very walkable location. While the cost of living is higher, it's not so high as to make my life in the Bay Area worse than back home.
* Vehicle Registration, Public Transportation, Gas
* Housing (rent/mortgage)
* Sales tax
* Etc.
The housing is a huge factor, given that 30% of $55k is $1300/mo (A decent house in most of America), yet 30% of 150k is $3750/mo (A nice cardboard box in the bay area)
That article continues on with "Start a Family [...] It’s been 10 years". It is indeed common that people in high-cost areas feel unable to start families earlier, but that isn't something to just accept as normal. It is better to have kids when you have energy for them and when birth is safer. Starting earlier also allows for the possibility that you might end up wanting a larger family than you had initially expected. For example, I sure didn't imagine I'd be having 12, but that probably could not have happened in the Bay Area.
In 10 years, one ought to have paid off a house.
The article mentions college, which can be had cheaply, but neglects to mention private schooling. Normally this would be the larger expense by far.
The "middle of nowhere" comparison also seems a bit low for salary. It might be right if you tossed a dart at a map of the USA to determine your location, but not if you chose a low-cost area with a suitable industry.
I agree but people have gotten used to constantly rising house prices and started depending on it to pay off their home. In an environment with rising house prices your best strategy is actually to avoid paying as much as possible. Low down payments and 30 year loans mean that if you spend $50K on a 2 million dollar house and it appreciates by 10% to $2.2 million you have received a 4x return on your investment. If the house price tanks by more than $50k your mortgage is underwater and because you never planned to repay the entire loan, you will have to apply for bankruptcy.