Beachfront vs non beachfront isn’t equivalent, but two random fields in Northern Virginia next to each other with similar features should be. Anyway, LVT definitely doesn’t care about what you built on the property so this distinction just doesn’t matter.
Yes… but you can’t just look at vacant lots in abstract. If you have two lots and they are taxed the same or similarly, either the owners pay the tax, or they sell the lot because they aren’t providing enough economic value to afford the tax, or someone who has a better economic idea buys the lot to improve it.
In your example of the similar lots you demonstrated this, but drew the wrong conclusion. You realize economic value from the 10,000 people on Lot A because the owner had to either improve it or sell it so that it produced economic value.
> Beachfront vs non beachfront isn’t equivalent
Right, which is why they’d be taxed differently… depending on other factors. L
> Anyway, LVT definitely doesn’t care about what you built on the property so this distinction just doesn’t matter.
That’s exactly the wrong conclusion! LVT cares more than any other tax system because the tax revenue is reflective of the economic value of the property.
This is false, LVT only cares about the hypothetical economic value not the actual economic value.
Let’s say you buy some farms in the middle of nowhere for 10k/acre and put a theme park on it. Your LVT taxes are in theory unchanged, though depending on how it’s calculated the value of land around that property increases because it’s near a theme park. Then your LVT increases when people start to build hotels etc around your property.
What’s interesting about this model is your incentivized to develop land as a single unit. A sports stadium with associated shops and hotels is valued as if none of it was there, but split it up and each pays more due to proximity to other businesses.
And of course what improvements are included or excluded is rather arbitrary. Do you value a natural or artificial pond differently?
