It’s benefiting the residents who use the improved public transit.

The externality applies to residents who do not take public transit too. The two decisions should not be coupled.

If you want to do a Pigovian tax, do a Pigovian tax properly. If you want to do congestion pricing, make it budget neutral to users. If you want transfer payments, do that and call it that.

>The money isn't going to residents.

Does your state government send you a portion of tax receipts? No? They must be putting it in their mattresses instead, eh? Please.

So it's a tax. Fine, don't call it congestion pricing.

but it's purpose is to lower congestion, and the fee varies with time of day based on congestion, and the people who pay it are contributing to the congestion so ... it's a congestion priced fee. Not clear it's a tax at all, in the same way a fishing permit is not called a tax.

Does your state government send you a portion of toll receipts, DMV licensing fees, etc, etc, etc?

So that makes those taxes too?

And even if they are taxes, so what?

Congestion pricing in NYC is a tax on the selfish. And it's not nearly high enough. It should be at least ten times higher.