We are playing 1/2.
Villain is a spewy LAG who will bet any scare card and anytime he's checked to, will raise when feels weakness etc... He raises to 7 first on the CO.
Hero is on the BU with A8. This hand has poor playability and bad reverse implied odds but it looks like a good hand to 3bet him with.
How wide can we go? Am I overlooking something?

Why are we looking to show strength when he spews vs weakness? We play 8 out of 9 hands in position vs this bozo and his bet size is really small so I'm going to look to play playable hands in position vs him by calling pre. However, A8off isn't very playable. Just folding here.

Assuming the blinds aren't super passive we can probably widen our 3bet range to 88+/AT+/KJ+

Also need stack sizes

What are stack sizes? What sort of range is villain playing? If nothing else, what percentage of hands and is he adjusting for position? Will villain fold to a 3 bet or a flop c-bet? How many hands is he playing? What sort off players are in the blinds here?

How wide you can go here is really situational. A8 probably won't make the cut for value but if he will give up to preflop 3 bets then it has some bluff value.

sorry forgot to mention we are 200bb deep.

His vp$ip is something like 80%.
He's never folding to a 3bet, for any amount.
He doesn't care about position.
He will fold to cbet about 15% of the time and go to showdown with bottom pair if the board is not too scary.

Earlier he was UTG with a live straddle, I raised from UTG+1 and he called 86o. He c\c my cbet with a gutshot, checks the turn and checks the river when he hits with the intention to c\r.

Easy fold with your read

How often does he 4b, and do you think he would start doing it as a bluff if you 3b him wide?

The easiest answer is to open PokerStove and see what the top 40% of hands looks like and tinker it a bit as you wish, and that can be your value 3b'ing range in COvBU. It gets more complicated the earlier position you two are because you have to start worrying about players behind having 88+/AJ+/KQ or playable hands that they feel like coming along for the ride with.

It also becomes more complicated if he knows how to 4b bad hands and call good ones.

I'm certainly of the school of thought that the easiest way to adjust to a LAG is to play strong ranges preflop that can withstand a lot of heat, but if villain is raising 80% of his hands, and still LAGing it up postflop, then A8o on the button is a pretty insanely strong hand. Flop top pair, make money.

The problem with an aggro strategy vs LAG is your variance will go up.

Seems like you are only thinking on preflop strategy; 3bet and give up flop if he calls, A8 post is so terrible.

You want to 3bet him with like AT+, KJ+, 77+. If he's bluffing then let him bluff and call him down!!!!

You're speaking in absolute terms. A8o doesn't do you a whole lot when people don't commit anymore than a bet or two to TPMK.

A player cannot possibly sustain continuing 80% of ATC to 3bs and playing aggressive postflop without committing a lot of money with a lot of garbage which is massively dominated by a lot of hands that A8 flops.

As for variance, this is poker. I don't necessarily disagree, and in live poker where it takes months to see enough hands for your EV and your winnings to see remotely eye-to-eye, maybe you'll feel better off changing tables and playing the typical stuffy live regs who more consistently bleed chips. But if you're in it to maximize EV, this player's a god-send; take his chips when you have a better hand in better position with better ability postflop.

The way you describe him here he sounds more like a calling station than a LAG.