Journal of Urban Economics and Management

In addition to have some benefits for the users, private vehicles as a one of urban transportation systems, impose different costs and effects on environment and citizens who are not among users of private cars. Currently, only a small share of car prices is received as the annual tax of car ownership by the municipality, therefore it is necessary to review the process and the external car costs generated by vehicles, has been internalized. In this research, after the study of determining trends of the tax in other countries, and identification the affecting factors in determination the car use tax using factor analysis, we tried to provide a model to internalize the external costs, in order to increase sustainable revenues for urban management and optimize urban economy trends. Finally we tried to use know factors in a mathematical functions to calculate a proportional amount to the external costs generated by vehicles in a way that this proposed amount could be able to increase sustainable revenues for urban management and persuade citizens to use low-pollutant vehicles. The main suggestion of this research is to begin the process of increasing the dependence of urban economy and management of metropolitans Municipalities to unsustainable income resources such as building density and replacing them with scientific and sustainable incomes.