Here is how taunt works:
If you are #1 on hate list (ie the mob is hitting you and targetted on you):
Hitting taunt will add X amount of hate, where X is an amount based on the skill value of taunt. So a taunt with a skill value of 10 will generate less hate than a skill value of 100.
Now if you are not #1 on hate list:
Hitting taunt will pull the person's hate that is a the top, add 1 and then add the extra hate from the taunt skill value. So say you have 100 hate on a mob and your friend has 200. When you hit taunt, you get bumped to 201 and then get the additional hate points dependent on your taunt skill value.
That all make sense?