I mostly agree with that, except for two edge cases: (1) If the externality tax is used to raise funds for basics such as the police, then it's the lesser evil

I mostly agree with that, except for two edge cases: (1) If the externality tax is used to raise funds for basics such as the police, then it's the lesser evil to have it go to the general ledger. Where else would public funds be raised to fund these basics? (2) In the rare case that the externality is so broad, it can go to the general ledger, such as with carbon pollution (to the extent that it's harmful). Trying to figure out who is harmed and by how much is itself a bureucratic and potentially wasteful process that can be coopted by government corruption, so we should be weary of that.