"The compensation for a carbon tax won't work because the PRIVATE SECTOR will rip us off by adding extra costs irrespective of whether they need to or not."
You've completely missed the point.
In this case the private sector has no interest in ripping people off, when costs rise, their operating margins need to be protected. They want to remain as competitive as they can but they also want to stay in business. The point is to remain in business they will HAVE NO CHOICE but to raise prices if their profitability is eroded by any significant degree.
In addition to that, given that a substantial portion of consumers will be having extra money shoved in their pockets there is in fact no incentive to NOT raise prices.
These ivory tower economists love their simplistic models where companies are mobile, everything has a substitute and they have infinite flexibility. They don't. If the government think that all these extra costs are going to be absorbed by the corporations, retail outlets, transportation companies, manufacturers for the benefit of their moral utopia they simply don't deserve to be in government.
Basically you're being lied to.
While I'm on this rant I also think it's completely disgraceful that those people for this tax only are so if they get compensation. How moralistic of them to have someone else pay for their warm and fuzzy moralist choices. They only want to save on Carbon if someone else foots the bill, they want to take money off some other family so they can pretend they're doing something worthwhile. How big of you.
