Does LVT create a moral hazard? I don't think so. Have we seen municipal governments with liquor taxes rush to run pro-alcohol ad campaigns and relax night life

Does LVT create a moral hazard? I don't think so. Have we seen municipal governments with liquor taxes rush to run pro-alcohol ad campaigns and relax night life restrictions in order to maximize tax revenues? No. Have carbon taxes motivated governments to promote carbon use? Again, we have no evidence of that. Indeed, for pretty much ever tax ever studied, we find the relationship you would imagine: increasing taxes on X, reduces X. So in that way, since LVT just adds to the cost to exploit any resource, it will reduce exploitation of nature. But more importantly, LVT is in no way incompatible with other regulations or restrictions on land use. i.e. you can have LVT and a law against strip mining.