From the LVT group on Facebook, (H/T to John David Kromkowski)
There are 2 farms next to each other. Same size. Farm A is a bit more fertile. So we can I think agree that Farm A has higher lvt. Farmer B figures out that by planting different things and how he tills he can increase the fertility. 20 later, Farm B has greater fertility than Farm A. Farm B now get a higher LVT levied than Farm A.
Farmer B says hold on a second, that increased land value is due to my labor and ingenuity, why should I have to pay more LVT?
My answer to that would be, is that, just because it's land it doesn't mean that all the rent that a landlord could get from it is land rent and therefore taxable under LVT. This is the same fallacy as those who think that LVT would only apply to agricultural land, because land in built-up areas isn't commonly referred to as "land". The value of the rent that is obtainable from agricultural land because of its ability to grow crops or graze animals is the same as the value of the rent that is obtainable from urban land because it has a house on it. It's not the value of the unimproved land.