This is a major reason why a Land Value Tax is more equitable than a property tax. You own land in downtown SF? That's a very scarce resource, and you ought to

This is a major reason why a Land Value Tax is more equitable than a property tax. You own land in downtown SF? That's a very scarce resource, and you ought to be taxed on it in order to make sure it's correctly utilized. (Note: the infrastructure within SF is relatively good, which is theoretically what the land tax is paying for.) You own land outside of a small town and you wish to build a factory? Your land is next to valueless, and the improvements you build shouldn't be discouraged through taxes. (Note: the infrastructure out here is fairly poor, which explains why the land tax is minimal.) To jump to a theoretical conclusion, Joseph Stiglitz demonstrated through the Henry George Theorem[0] that the quantity of public goods a municipal government supplies is equal to the amount it would receive in a land value tax, given certain assumptions. In short, a land value tax would optimally fund local government. [0] https://en.wikipedia.org/wiki/Henry_George_theorem https://en.wikipedia.org/wiki/Henry_George_theorem