[smallnamespace]

> With a tax on land value only, the single lot with two stories is preferred.

Yes, but that's because tax on land + improved value distorts incentives (by discouraging improvements).

Usually when we say the LVT doesn't affect incentives, the baseline of comparison is against no land taxes of any form. In that world, you would prefer to develop the single lot because you need to buy less land, so the result is the same as with LVT.

[Zalastax]

> Usually when we say the LVT doesn't affect incentives, the baseline of comparison is against no land taxes of any form.

That really confused the whole discussion as the current situation is tax on land + improved value, making it look like you were arguing from the other side. No tax at all is anyway taking it to the extreme as the government need money, so it becomes merely an academic exercise.