That is so horrible

My thoughts are with your family and your pooch.
I had a similar issue with a neighbour who had a problem with our cats sitting in the shade under the tree in is front yard. He used to kick them, come over and abuse us.
I remember one day I came home and my room mate was in tears because he had come over and threatened to kill them for going in his yard.
One morning I went outside and found a meat ball at my front door. Now, NOONE in the house ate meat, we were all vegetarians/vegans. And upon removing the ball and hosing the concrete underneath it, it actually bleached the concrete, so it was definitely baited.
The R.S.P.C.A couldn't do shit, neither could the police, the policeman was very understanding because he had similar issues with neighbours with his dogs, and took it upon himself to actually have words with the neighbour about making us feel uncomfortable in our own house. But still.
Try and get him on other accounts, like entering your property, or if it comes down to it, install a security camera in your backyard - they cost like $100(from tandy) and it would be well worth it. I would also be having words with your neighbour, even if you don't accuse him, just play ignorant, go over and tell them that some loser attacked your dog and you were wondering if they'd heard anything, and just say you thought you'd best tell them (especially if they have children or pets) that there's a 'creep' hanging around. I would personally be using insulting words, they'll get it. Tell them the police are aware and will be monitoring it.
Scare tactics are worth a shot, but without directly putting it on them, if you outright accuse them to their face, more harm than good could come of it, especially since they live right behind you!