But rebating them in cash does provide that lifeline, or at least undoes any regressive effect. And simply sending monthly or yearly checks (depending upon how high the taxes oare) is simpler than piling yet another another complication into the income tax. Now I know it does not pack in as well targeted a subsidy to the very poor as Patrick would like. but it packs in as much as is reasonable for a carbon tax. You can't expect an energy policy alone to carry all of the burden of helping the poor. It discourages carbon use and helps the poor at the same time, and politically neutralizes some of the opposition you would get from prosperous workers and the middle class.
Bartlett: no I have NOT forgotten that the object is to discourage carbon consumption. Consumption taxes, no matter where levied tend to be passed down almost 100% to consumers. (I'm not going to argue with you if you disagree on this. Talk to the economists on this list.) But even with rebates, the incentive remains. Most people are going to break even on this. OK if you break even then direct and indirect energy prices go up for you, and you have more money to pay the increased prices. So energy becomes a higher percent of your expenditure. (Work out a simplified example if you don't believe it.) You still have incentives to reduce your energy consumption, to the extent it is in your power. And everybody who sells you stuff has an incentive to cut the energy component in the stuff they sell you - cause that way they can either lower the price and get more of your business or keep the price the same and make more profit from what they sell you.
Poor people who get more income still have almost the same thing happen to them. Unlike ordinary working blokes and the middle class, their income even after higher prices (that is real income) is up a bit--not a whole lot though. But energy prices have gone up as well, even if not quite as much as income. So energy expenditures are accounting for a greater percent of their consumption as well, even though they can buy a bit more than before. So incentives for them are still to save energy, and the same incentives apply to people who sell energy to them.
The only people who this does not apply to are really poor people, people living on a dollar a day, people living on $5 a day, perhaps a bit beyond that. Now you are talking a major gain in income - enough to produce an increase in energy consumption (though I suspect they will start with an increase in food consumption). But you know, people in that bracket don't consume a whole of energy. And for people in that bracket it is up stuff beside pricing policies to make sure they get that extra energy in renewable form. I mean run electric wires into their villages with wind generators or solar power, and pumped storage for reliability, at the other end. And while you are at it provide them clean water, and basic sanitary waste disposal (sewers, or composting toilets or something). Clean water and sanitation will save a hell of a lot of lives among the really poor, but electricity to run some lights and cell phones, a refrigerator and backup a solar hot water heater, and power a radio or two can really make their lives better.
But don't put the whole burden of progressive reform on pricing policy.Some of the progressive reforms you need are going to have to come from some place other than a carbon tax. If global warming is going to be solved it won't be by a movement that centers around global warming. It will be as part of a coalition that wins general progressive reforms--in short a left resurgence of which global warming issues are only one part.