This is why some [who?] have advocated 100% rebating of the revenue from a Pigovian tax; e.g. if a smoking tax brings in $10 billion, that $10 billion is rebate

This is why some [who?] have advocated 100% rebating of the revenue from a Pigovian tax; e.g. if a smoking tax brings in $10 billion, that $10 billion is rebated from the income tax, so there is no revenue. It removes the misincentive for government to want more smokers, or to raise smoking taxes past the point of public health benefit (for the revenue). It also has a a second advantage (debatably) that it alters the tax incidence; e.g. if a smoking tax is regressive (which it is), then if the matching rebate is sufficiently progressive, the combined policy is flat. It doesn't transfer wealth from poor to rich, but from poor smokers to poor nonsmokers (I think).