A land value tax only taxes the lane value, not any improvements. Improvements can make it more valuable of course (e.g. via proximity to work, entertainment, s

A land value tax only taxes the lane value, not any improvements. Improvements can make it more valuable of course (e.g. via proximity to work, entertainment, subway, etc.) but the improvements are not assessed. The idea is that taxing improvements means reducing the incentive to build and ultimately passing along the tax to renters. A LVT doesn't allow pass through as the supply of land is fixed, and a tax cannot reduce the supply of land. It encourages more intense use of land in expensive areas and reduces land speculation. You can think of it as a rent to the government for the land. Growing companies who buy expensive core land are punished for making no use of the land, but if it's a soulless suburban office park or rural land kind of deal the costs are far lower. Really what would happen is zoning would be looser as the incentives align and therefore a greater supply of housing and offices would follow, aiding growing companies.