[bee_rider]

Wouldn't it be easiest to tax some of the raw materials that go into fuel production, rather than tracking every fuel use? In that case, the CO2 tax will naturally fall equally to everyone, including individual people. The rebate is just there to cancel out the effect of an inherently regressive but technically convenient way of doing things.

[Groxx]

That's generally the idea of a flat tax, yeah. Tax everything at point-of-collection/creation (e.g. "you cut down a tree" or "you burned a log") or point-of-import (likely offset for similar taxes collected by the origin country), and there's no need to track anything beyond that point. E.g. re-use or re-selling is (CO2-)tax-free because it doesn't change the net input/output of the whole system.

Which rarely happens in practice, and we're so far from accurately taxing all these processes that it isn't even a dream of a dream. It's mostly tackling big targets, since that's where a ton of the impact-per-dollar-and-per-outrage can be found.