The externalities affect everyone, including people who dont own cars.

In that same sentence I mentioned the slowing down of innovation, not cars.

The government gets to decide for the people because that’s what a democratic majority wants. If you don’t want it go full anarchist. Just don’t come crying to the government to protect you when you inevitably take it on the chin.

For example would you want laws that ban giving people the mother of all beatings in the street? Or just tax it really high? Someone might just have some money burning a hole in their pocket and an intense desire to teach a lesson in regulations. Everyone has some strong opinions about their own freedom until someone else’s freedom punches them in the teeth and then they’re little lambs lining up to ask for regulations.