1) Send taggers to design school. Are taggers looking for a creative outlet? Why not hone their skills, and lead them to a more productive path in society?
2) Make tagging tools non-permanent and cheaper. The philosophy behind this is that you can't stop tagging. Let's admit defeat. For whatever reason, kids/adults will want to tag to gain attention or rebel. Efforts in the industry so far have been focused on making paints and surfaces more resistant to spray paint and permanent markers. The other side is make spray paint and permanent markers less permanent. Using some sort of soluble ink, the effects of these will wash off if it rains, or is doused with a water based solution. Further, by making these tools significantly cheaper than their permanent cousins, it's hoped that these tools will became the "taggers choice".
3) Use humour against taggers. Touch up their tag with is a "moron" or is an "amateur".
4) Use exploding ink against taggers. Similar to those that you would find in department stores, taggers would be exposed to easily indentifiable ink, if they entered a secured area.
5) Use manure surrounding walls with frequent attacks. If they want to tag, they better get ready to smell and step in poo.