That's pretty drastic, and would probably only be the best alternative on a densely packed island. Seems like overkill for any other situation.
If you live in the US, there's a very good chance that's coming from the property and sales tax everyone pays, not any tax on your vehicle.
So Manhattan or the San Francisco Peninsula?
I suspect the refusal to kowtow to car owners and the density are interrelated. Tokyo is more dense, in (small?) part, because there is far less space consumed by inanimate appliances.
If you want trees, a sidewalk and bike lanes something has got to give.