You are assuming that people using Tornado Cash are only seeking privacy from governments.

You could want to use Tornado Cash for other forms of privacy, while still respecting your obligations to governments.

For example, suppose you are a company that pays salaries in tokens on the Ethereum blockchain but you want to do this without disclosing each employee's salary to the rest of their peers. You could fund a bunch of fresh accounts through Tornado Cash and distribute private keys to your employees off chain so they could access their funds.

Everyone involved could be completely respectful of taxes, etc. but they would still benefit from the privacy offered by Tornado Cash.