Likewise, I've no problem with paying for a parking permit. My street used to be used as a free car park for the city centre until the peripheral zones were introduced. Used to be crazy every working day - a queue of out-of-town cars at the top of the street watching for residents leaving their house, and literally following you down the street hoping you were going to get into a car and free up a space for them. Not pleasant, and really not a safe zone for kids in the morning. Permits came in, problem went away.
While this year there seems to be more emphasis on the permit increase counteracting the proposed transport budget cut, in previous years they were claiming it was an environmental encouragement tax.
I do think it can form a part of wider incentives to reduce car use. The main problem with it is that it takes no account of whether you drive your car or not. For example, my own car basically just sits there Monday to Friday because as a family we do everything by bike during the week.
But the law of unintended consequences creeps in. Ironically, the cost of a permit for me is right on the borderline where it is almost more expensive to leave the car parked at home than it is to take it to work and park for free during the day. Don't worry, I won't. But there must be quite a few people in this situation?
CO2 band is already required to be supplied when renewing the permit. It would be easy to supply verified mileage also. If we want to reduce car use, perhaps there could be some sort of linkage of reduced mileage to reduced permit cost?