Or the other way to look at it is "This land has lots of valuable community improvements like nearby restaurants, shops, parks, good schools, walkability. Ther

Or the other way to look at it is "This land has lots of valuable community improvements like nearby restaurants, shops, parks, good schools, walkability. Therefore, the land itself is worth more. It is more economically efficient if more people get to benefit from the positive externalities of a good location, and so we should incentivize development in the locations that are most valuable." Most areas can support a skyscraper, but it doesn't really make sense to build one in the middle of nowhere. Conversely it doesn't make sense to keep prime real estate next to shops & public transit a surface parking lot. LVT incentivizes developing the parcels that are in good locations into high-density, high-value uses. A traditional improvement-based property tax reverses those incentives: if you develop your parking lot into a skyscraper, you pay much more in taxes, which may be unaffordable for smaller non-corporate owners, which gives them an incentive to hold onto them and keep them as marginal low-productivity uses.