I live in NYC and the city does indeed charge higher property tax on more valuable properties, so I'm not exactly sure what point you think you're making here? Charging property tax proportional to the value of the property is common across basically the entire world (as far as I'm aware).
I know. I'm just wondering if they increase the tax by 80x for those properties (like $12 -> $850), do you think it will make the overall market better somehow?
If people were buying properties, and leaving them desolate and unused for long periods of time in the hopes of cashing out one day later, then yes absolutely.
That's why I mentioned NYC. Because people say it's a problem there, i.e, a lot of properties are just bought and not occupied.
What happens in NYC is actually the opposite of laws that discourage squatting - the tax laws, depreciation schedules, and other financial products like property value estimation actually encourage building owners to pursue unoccupied-ness in many cases.