I've just joined a new Taoism discussion list. It's hosted on the Unitarian Universalist "Church of the Larger Fellowship" site (for more on this see the following post). One of the first posts asked about Taoism's view on the existence of Evil and what it tells us about dealing with people who are destructive or intend to cause harm. Answering this question has probably been the most difficult post to write, requiring a lot of thought, and I'm not completely sure about everything in my answer. For what it's worth, the following is the answer I arrived at...
From a Taoist perspective Evil doesn't exist - it's just an excuse we use to distance ourselves from human actions which we find abhorrent. By saying "it's evil", "he's evil", "she's evil" etc, what we are really saying is that they must be evil or being influenced by evil because there's no way we would ever act like that. Of course the reality is that the potential for such actions lies within all of us.
So if we are all capable of truly "evil" acts, why are they relatively rare? Followers of monotheistic religions often claim that it is because of the moral guidance that they offer, yet people that don't follow those religions seem no more likely to commit such acts, and in fact some of the worst cases of genocide have taken place in countries with a strong monotheistic tradition (e.g. Germany, Rwanda, Bosnia, Darfur).
Taoism gives a different answer. We each have something called our "Te", which is our "inner nature", our bit of the Tao. Taoism teaches that the closer we are to being in harmony with our Te, the more in balance we are with the whole of existence. The further we move from our Te, the greater the stresses and pressures we are subject to. Chaos theory demonstrates that a complex system that is stressed has the potential for wildly extreme behaviour. Think of a pan of water boiling - when first the heat is applied patterns form as convection occurs, neat patterns of small bubbles start rising to the surface, and then at some point the amount of energy in the system hits a point at which it starts to wildly boil without any obvious order. People are the same, except instead of heat, it is the distance from harmony with the Te that is the driving force. That is the source of "evil."
In the case of some sexual crimes this distancing can easily be seen. The perpetrators are those who for some reason have become distanced from naturally expressing their sexuality - possibly because of attempting to conform to religious or social "norms", psychological problems resulting from parental relations, or due to being abused themselves. They have become so distanced from their Te that their sexuality becomes distorted and tangled with issues of power and self-worth, with pressure building until it finds an outlet.This doesn't excuse their actions, but understanding the source is a lot more useful than attributing the actions to some nebulous concept of "evil."
So what does Taoism teach us about dealing with "evil?" Taoism has a long history of supporting acts to defend the self or the defenceless but it offers no easy answers. It does however provide guidance which we can use to try to navigate our way through the problems we encounter. To explain these I'll talk about violence, but the principles can be applied to any situation.
In anything taken to the extreme there is the root of its opposite. So if you meet violence with enough violence, peace can occur - possibly because all the participants are sick of the carnage or dead - but if the violence is not in harmony with our Te, we might bring peace through violence but move ourselves further from our Te, increasing the stresses and maybe making us act as badly as those we were trying to stop.
To balance one action you can apply the opposite. So to combat violence you can use passive resistance. Gandhi used such tactics against the military power of the British Empire and won. By employing the opposite he took away the power of the violent. However, excessive passivity in itself can lead to violence, and perhaps events in India after independence can be seen as partly the result of this?
Taoism advocates finding the middle way. In Tai Chi the aim is to use your opponent's energy to defeat himself. Through a careful balance of force and passivity the energy is drained from the opponent and he is unable to attack any more - the heat under the pan is turned down, at least for a while. In everyday life the same techniques can be applied.
Back to the original question "how to deal with other's 'toxic' auras and behaviour?.....since others sometimes actively seek out to harm you or people close to you?"....A Taoist wouldn't seek to "defeat" or "fix" such people, but rather would try to use a mix of intuition, intellect, guile, distraction, force and passivity to negate the effects of their actions and to reduce the energy driving it - for instance an angry person shouting and bullying loses energy rapidly when encountering somebody who seems calm, polite, controlled and unflustered.