But, I lived in Germany for 5 months and only rode in a car 2 or 3 times, and Germany doesn't even have the best public transportation in the world.
Public transportation will require a lot of tax money, but roads require a lot of tax money too.
Public transportation tends to be much cheaper for riders than private transportation is for drivers. A year-long ticket for Munich is around $1000. At current prices, that won't even buy you 10k miles worth of gas in a compact car, to say nothing of the price of the car itself, insurance and repairs.
I say that to say this, if people have more money in their pocket, they will tend to spend more money, so the difference could easily be made up in sales tax on all the newly-freed-up disposable income.
http://www.theatlantic.com/business/archive/2011/06/the-fina...
On a cost basis, public transportation is more expensive and less versatile than roadways.
// no bus stop within 90 miles of where I am and the flooding is seriously problematic for rail