More accurately, it applies to a signalling of intent of confiscating other investments; we don’t actually care if people panic about land being confiscated because buying land (rather than improving it) isn’t productive in any way. (We may also want to partially redistribute resources towards the losers of the land confiscation to compensate for the lost investment—that is, we may want to the government to buy the land rather than confiscate it, though it would be bought at lower than market prices.)
It is weird to claim that the perceived consequence of planned incrementalism is “near-future governments want the money now, and will accelerate it”. The actual problem is almost certainly the opposite: near-future governments will want to cut taxes, since cutting taxes is incredibly popular, and will therefore stop or reverse the planned incremental LVT.
LVT applies to all land, but not to the improvements on the land.
We do not care about disincentivizing an investment in land (by which I mean, just buying land). We do care about disincentivizing investments in improvements on the land (by which I include buying the improvement on the land, as well as building such improvements). A signal of LVT intent will not have negative consequences unless it is interpreted as a signal of broader confiscation.