Comment by thayne

> it inherently discourages landowners from searching for new and innovative uses for their land

That seems like a feature to me, as long as the tax enough less than the increased value of the land, and using up a funite resource, lime oil, correspondingly decreases the evaluated value of the land. If you discover oil on your land, I think you should be taxed more. And I think that adding a reasonable dicencentive to things like drilling for oil isn't a bad thing.

Also, for non-renewable resources found on a property that are sold, not rented, I think it could make sense to tax them differently, such as based on the sold value, when it is sold, rather than increasing the taxes on the land itself.

> Another issue with the LVT is that it acts as an implicit tax on nearby land development.

This is the case for property taxes, regardless of whether it includes "improvements".

Also, it doesn't remove the incentive. If an improvement on one parcel increases the value of a nearby parcel, that means you can rent or sell that property for more, and the ducentive isn't really any worse than a tax on that increased income being a disencincentive to increase the value of nearby land.

There is a related problem where increased value can result in families no longer being able to afford taxes on their residence. Although its not like gentrification isn't already a problem, and I'm not sure it's any worse than the problems with other tax systems. It could also be combatted somewhat by lower tax rates or deductions on primary residences (possibly with a limit on the area that qualifies).