The avoidance argument against increasing taxes on the rich is that doing so is pointless because they will find ways to nullify the increase. They might use established methods or develop new ones, but (the argument goes) they will manage to avoid paying more taxes. Therefore, there is no point in wasting time trying to make them pay more.

This argument has a certain appeal in that there is little sense doing ineffectual things. As such, it would seem reasonable to leave things as they are, since this change would do just that—only at the cost of enacting ineffective legislation.

Despite this appeal, there are two factual issues that need to be addressed. The first is the issue of whether the rich would try to avoid a tax increase. Some of the wealthy have at least claimed to favor higher tax rates, so they might accept the increase. However, most people (be they rich or not) generally prefer not to pay more taxes. There is also the fact that many of the rich already do all they can to minimize their tax burden. There is no reason to think that a tax increase would change this behavior. As such, it is reasonable to infer that most of the rich would try to minimize the impact of any tax increase.

The second factual issue is whether the rich would be able to nullify a tax increase and to what degree. One approach is to consider that if the rich are concerned about a tax increase, then this indicates that it would affect them. After all, people generally do not worry about things they believe will not affect them.

A reasonable counter is that while the rich will be affected by the tax increase, their concern is not that they will be paying more taxes, but that avoiding the increase will come with a cost. For example, they might have to pay lawyers or accountants more to enable them to neutralize the increase.  Or they might need to lobby or “donate” to politicians. It makes sense that the rich would be willing to expend resources to mitigate any tax increase. As if the expenditure would be lower than what paying the increase would cost them, then this approach could be rational. It could even be claimed that some might be willing to pay more to avoid the taxes than the taxes would cost them, perhaps as a matter of principle. While this sounds odd, it is not inconceivable.

Another approach is to consider how effectively the rich avoid existing taxes. Even if they are somewhat effective at doing so, the increase could still impact them and thus generate more tax revenue (which is the point of a tax increase). As such, an increase could be effective in regard to the stated goal of increasing revenue.

In addition to the factual issues, there is also the issue of whether the principle that underlies this argument is a good principle. The principle is that if people will be able to avoid a law (or policy), then the law should not be passed.

This principle does have a pragmatic appeal: it seems irrational to waste time and resources creating laws  that will simply be avoided. This sort of avoidance argument is also used against proposed bills aimed at gun control. Interestingly, most who use the avoidance argument against gun control do not accept this same argument about abortion laws or drug laws. This is as should be expected: people tend to operate based on preferences rather than on consistent application of principles.

One possible response is that if a law is worth having, then steps should be taken to ensure that people cannot just avoid it. If some people can get away with murder, then the morally right reaction would not be to give up on the law. The correct reaction would be to ensure that they could not get away with murder. Naturally, it can be argued that the tax increase would not be a law worth having—but that is a different argument from the avoidance argument.

A second possible response is to reject the consequentialist approach and argue that the fact that people will be able to avoid a law is not as important as the issue of whether the law is right. Some people take this approach to drug laws: they accept that the laws are ineffective, but contend that since drug use is immoral, it should remain illegal. As always, consistency is important in these matters: if the principle that moral concerns trump the pragmatic concerns is embraced, then that principle needs to be applied consistently in all relevantly similar cases. If the principle that the pragmatic should trump the moral is accepted, then that needs to be applied consistently as well. While the issue of whether such a tax increase is morally right or not is important, my concern here is with the avoidance argument. But, if the tax increase is not the right thing to do and the rich would just avoid it, then imposing it would be both wrong and a poor  pragmatic choice.