[1] which no SUV's nor trucks used as passenger cars, do because they are classed as 'utility vehicles' and have lower safety/fuel economy standards -- which is why the auto-makers went whole-hog on making/selling them, it got their CAFE averages down artificially.

In states of Australia registration is more expensive depending on the amount of doors and cylinders your car has. This doesn't seem to stop big cars being popular though, the #1 selling car in Australia is the Ford Ranger (which is BIG in Australian car standards). We're working on getting F150s sized vehicles even more heavily taxed, they aren't seeing wide adoption here and they're pretty highly criticised.

In cities like Rome you can see many small cars due to the nature of their streets and parking.

For highway driving these cars are a bit less comfortable but honestly modern Kei cars aren't even that bad. The Fiat 500 isn't a Kei sized car but it is also a very reasonable highway and city car, it can happily do both.

I also think it's odd that people don't already choose other options w/o a tax in place, considering the price of a bigger vehicle is almost always just going to be higher because of materials and a bunch of other factors.

You take a defensive driving course, I’ll let you drive a tank down the road. But my neighbor’s kids should not be behind the wheel of a death dealer. Those vehicles were meant for skilled laborers, not Sally who is on her phone while driving.