Comment by bpt3

> But a traditional property tax incentivizes keeping a lot empty, because as soon as you create something on it, you start having to pay more tax -- regardless of whether the thing you created is generating revenue.

I know this is what LVT advocates say, but it's not true in practice. An unimproved lot is a liability from a cash flow perspective unless the tax rate is 0%. That's an incentive to improve the lot and derive value from it (which can be income, or some sort of personal benefit like shelter).

> Another way of thinking about it is: most taxes, including income and property taxes, disincentivize productive economic activity. Land value taxes improve allocation and reduce commute times, so instead of acting as a drag on the economy they act as an accelerant -- while also helping fund the government, just as other taxes do. A neat trick.

This claim is largely theoretical, as the LVT has very limited adoption worldwide (I believe Denmark is the only country that uses it without broad exemptions for residential real estate and other common uses, though feel free to correct me) and does not seem to have produced a radical transformation in those limited applications within some countries and a few depressed US cities.