Comment by sorcerer-mar

No, what prompted me to say you don't understand LVT was the suggestion there needs to be some determination of what the "highest use" is.

Yes, if you hold land in a place where a lot of people around you (and/or the state) is investing in economic development, your carrying cost will increase and the ultimate goal is for you not to be able to extract uncapped gains from the appreciation that people around you are generating.

> you will raise taxes on their now-high value urban SFH because they aren't producing anything (aka "fully utilized")

This is the type of statement that makes me suspect again you do not understand LVT. You don't raise taxes because they aren't producing anything. The tax goes up as the value of the land goes up as already occurs with property taxes. The only difference is that if you decide to build a second house on your property, your taxes would not go up under LVT, whereas under the current property tax regime, it would go up dramatically. This has the net effect of incentivizing people to fully utilize their land, but does not require any determination of their utilization nor does it "raise taxes" on them for failing to utilize.

> like you said, it's a neutral shift. if the cost of the property goes down because of a higher tax, then it's a neutral shift

This is not what's described by "neutral." It's neutral because right now your property tax is already both an LVT and a tax on the improvements. LVT would increase the LVT component and decrease the improvement component.

If the introduction of LVT reduces the value of a property, then it would accordingly reduce the carrying cost of that property. Your two variables are mutually exclusive under a revenue-neutral scheme.