You did not present a reasoned argument as to why this is a mistake. Taxes are one way to incentivize behavior AND ALWAYS HAVE BEEN, historically.
> The only question is how to raise those funds fairly.
This is not the only question, specifically because "fair" has a philosophical answer, not an objective one.
> It's not a penalty
That's a matter of perspective. It's bad because it's regressive (historically), as you allude. It's not like there can't be a better sliding scale based on cost/consumption indexes but that's not practical in a country as large and disparate as say... the USA.