> Real estate is predicated on the concept that adding value to the land increases its value. So... what exactly become the merit of taxing land over property?

> Real estate is predicated on the concept that adding value to the land increases its value. So... what exactly become the merit of taxing land over property? If you tax property, the value of the land is included in that tax. An issue with property taxes as they are currently implemented is that they discourage development. Someone who owns a parking lot in downtown Los Angeles will pay very low property taxes on that land relative to someone who has built a large apartment building (even setting aside Prop 13). If the owner of the parking lot decides to build an apartment building on it, their property taxes will go way up. So the county is punishing the property owner for developing on that land, even though it's socially desirable. The idea is that the land value is value that is created by the property's location, not anything the owner has specifically done. In other words, it's value created by the rest of the society that the owner has captured. However, development on the land is produced by the owner. A land value tax captures some of the value produced by society as a whole and does not tax value that was created by the owner. This incentivizes owners to develop on their land. (Or more properly, doesn't disincentivize development.)