In 1789, an octogenarian Benjamin Franklin wrote a letter containing the famous opinion that “in this world nothing can be said to be certain, except death and taxes”. Franklin was mistaken. Many taxes are easily and legally avoided by the simple expedient of not doing whatever it is that attracts the tax.
Our cities have been shaped by such tax-avoiding behaviour. Consider the slender canal houses of Amsterdam. As Kurt Kohlstedt and Roman Mars describe in The 99% Invisible City, these buildings developed in response to a tax code that focused on canal frontage. Furniture hoists were deployed to bypass precipitous staircases. It was a hassle, but people will go to quite some lengths for a tax break. A less pleasing example of tax-efficient architecture is the bricked-up window, common in London. The window tax was introduced in 1696 and sharply raised in 1797. At first glance it seemed to target the rich, but it also penalised the urban poor in tenement buildings as their landlords simply blocked up the windows to save money.
The cruelty and ugliness of such a tax is self-evident, but there was another cost, less obvious until you think about it: none of those bricked-up windows generated any tax revenue. Not only were the houses ugly, gloomy and airless, but they were also producing less tax revenue than originally hoped.