Reducing traffic congestion?

I'm no economist, but it seems to me that the government often levies taxes in order to influence people's behavior. For instance, we put a high tax on cigarettes as to discourage people from smoking.

Would it be possible to give people some sort of tax credit for living within a mile's distance of their place of employment? There was a story in the Salt Lake Tribune back in February about people who actually commute from Salt Lake County into Davis County each day for work. According to the story, about 9,200 workers commuted daily from SLCo to Davis Co. in 2004.

Whenever I talk to people about how good it is to live close to work, they always say "But we can't all live in downtown SLC." And they have a point. But if you work in Layton, or Bountiful, or Farmington, wouldn't it be nice to live there too?

Think about how many fewer traffic jams there would be each year, and how much less money would be spent on fuel if everybody made a serious effort to either live close to work or to work close to home. I've been in a situation where I've worked within a mile of my house, and it was so beautiful. I saved so much money on gas, and got some exercise by walking to work.

Of course, if people had a serious tax advantage to live in areas close to employment, it might hurt the real estate values in cities like South Weber, Fruit Heights, West Point, Herriman, etc., while helping the real estate values in Ogden, Clearfield, etc.