> Note that land taxes are only assessed on the value of the land, not the value of any buildings on the land. This incentivizes land owners to put the land to its highest and best use.
Doesn't it incentivize them to put land to the use that generates the most revenue? I don't see how that is necessarily the "best" use.
There will almost always be a way that a yard or garden could make more revenue, for example, such as by letting a bunch of advertisers put up billboards on it or letting someone use it for storage.
Is it really best to make it so that only the wealthy can afford to use land in a way that they enjoy rather than as an asset to be exploited for maximal revenue?
Do you think that's a problem with existing property taxes?
The main difference between property and land tax is that with a land tax, the structure isn't taxed. So you can build up "for free" wrt taxes, which encourages more density on the most valuable land.
E.g. land in the middle of downtown San Francisco that's currently rented out as a flat parking lot, could instead be built up into multi level parking or housing instead. Whereas the current tax structure would punish such developments by increasing the tax (which is why it's still a flat parking lot).
San Francisco is an interesting case cause they used to have a land tax and economists argued that's what cause San Fran to be quickly rebuilt after it was burned to the ground in 1906. Land owners were still taxed the same, even though their building was gone. They'd have to either sell or rebuild.
Contrast that with New Orleans after Hurricane Katrina. Property owners had their buildings destroyed, so taxes went to zero (taxes based on the property value, not the land value). This incentivized property owners to wait and see if their neighbors would rebuild rather than take immediate action.
> San Francisco is an interesting case cause they used to have a land tax
Property taxes on land aren't unique to San Francisco. It's basically standard practice in most cities to have one tax for property and one tax for improvements.
> Contrast that with New Orleans after Hurricane Katrina. Property owners had their buildings destroyed, so taxes went to zero (taxes based on the property value, not the land value)
New Orleans has separate property taxes on land and structures, so property taxes did not go to $0 after Katrina.
Overall property tax rates went up because income from taxes on structures went down, but unimproved lots still get a tax bill.
Most serious study on this suggests it would have the opposite effect: make it harder for the wealthy to horde land in the form of low density residences in prime locations where townhomes and apartments would be a much better economic outcome enabling many more people to live affordably in close proximity to their jobs.
I don't buy that. If there's one party benefitting from such tax, it's big players who can afford tighter margins. It's a play that mostly favours monopolists, who can also afford to have "serious studies" made.
Doesn't it incentivize them to put land to the use that generates the most revenue? I don't see how that is necessarily the "best" use.
There will almost always be a way that a yard or garden could make more revenue, for example, such as by letting a bunch of advertisers put up billboards on it or letting someone use it for storage.
Is it really best to make it so that only the wealthy can afford to use land in a way that they enjoy rather than as an asset to be exploited for maximal revenue?