"someone will adjust to optimize their outcomes under those rules."
It isn't even clear how to make them stop that, per se, because in general that's a desirable characteristic of the system. You can't use the tax system to nudge people or do anything progressive beyond the most basic and clumsy income-bucket based categorization if you can't set up incentives and expect people to "optimize" to them.
It isn't even clear how to make them stop that, per se, because in general that's a desirable characteristic of the system. You can't use the tax system to nudge people or do anything progressive beyond the most basic and clumsy income-bucket based categorization if you can't set up incentives and expect people to "optimize" to them.