By excluding capital from LVT tax base, people in quite different economic circumstances might be taxed equivalently.

"Nor would it be fair or just to treat different circumstances equally for tax purposes. Two landowners may have equally sized plots of land in similar locations, but one of them may have a big, luxurious house whereas the other one only lives in a small cottage. One may have a high income, whereas the other one lives on a small pension. Yet when it comes to paying their LVT both would be assessed on the value of the land alone, regardless of real estate values or income. Most people would not think that such a tax system fulfilled the basic criteria of equity. It is actually the same argument against LVT that is also often used against council tax, i.e. that it is unfair to treat different circumstances equally and that it is highly regressive."

theoretical