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Jiro comments on How should negative externalities be handled? (Warning: politics) - Less Wrong Discussion
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One major problem is the practical effect of adding new taxes. Adding a tax creates a group of people who benefit from the tax, either a part of government that gets to decide how to spend the tax money, a recipient of tax money, or both, and it is in that group's interest to let the size and purpose of the tax slip beyond its original intention. A carbon tax might be a good idea if it is revenue neutral, but there's no way you can make one that is guaranteed to stay revenue neutral.
You can't guarantee anything because of political will. But take in taxes, count total, divide by eligible recipients, electronic transfer money. It's not complicated to make it revenue neutral if you have the will to do it.