> Under the tax scheme described, the reverse is true.

Explain how.. In a dense urban area, with LVT, that lot that held a park will bring even larger tax revenue when the city sells it off to a developer. Having the tax be based on maximum potential usage will only increase the temptation to sell it off and remove yet another park from the people.

It would decrease land value since the park is no longer there. Tax revenue would decrease as quality of life decreases.

I think this assumes politicians who care about subjectives like quality of life, and who are able to think in long-term sustainable city finances instead of just maximizing what they can grab in current fiscal year. We don't have any such politicians in power in the US.