You make some very good points.
What I meant by correcting for externalities is imposing fines for things that have a social cost or burden.
And, related to that, what I meant was 0% corporate income tax, and my thinking was one could charge directly for costs incurred by society because of a corporation.
But the obvious question is how? Charging for some costs is straightforward, and some not. Part of the answer would be a high unimproved land value tax.
I want the dream restaurants to be taxed less than the union carbides, you know? But I feel like the way I want to do it adds complexity. Maybe it would be too complicated to do things this way? On the other hand, it sort of seems like how a lot of local govenments operate right now.