They do work very well at improving efficiency and cutting down on unnecessary travel. Do you think everyone in Europe loves driving gutless 3-cylinder shitboxes and agricultural diesels? Of course not, but for people who aren't rich and aren't car enthusiasts, the taxes make fuel efficiency one of the top priorities, and the manufacturers pay attention to this.
Average fuel efficiency is significantly higher in the EU, while theres no CAFE-like bullshit - which is why you can still easily get a bi-turbo V12 AMGs, V8 Land Cruiser, or whatever you want, and the manufacturers don't have to game the system by pushing useless trucks to people who don't need them just to take advantage of different economy standards.
As a car nut I'd prefer not to have the fuel tax so I could afford to run a muscle car and not cry when filling up my Miata, but as it stands, that's by far the easiest and also effective way to raise revenue and slowly nudge consumer preference towers better fuel efficiency.